UTC+8 ( BJT)

More Chinese futures contracts allowed to go international


More futures contracts in China will be allowed to seek the participation of international investors by China Securities Regulatory Commission (CSRC), as the country’s regulatory body has opened expressed its intention to promote dual circulation in the derivatives markets.

“Enhancing the opening to the overseas investors in our capital market will enable us to remove the clogs in our financial system and to accelerate high-quality development in the sector,” Fang Xinghai, deputy head of CSRC, shared at a financial summit in Shanghai on October 24, according to a post by the Dalian Commodity Exchange.

The opening policy will apply to China’s series of derivatives products including certain stocks, bonds, funds, and commodities, he stated, and this is part of China’s new development model proposed by the country’s President Xi Jinping – the dual circulation.

Among the latest nonferrous and agricultural commodities that have been approved to go international are the copper futures that will be listed on the Shanghai International Energy Exchange (INE), an international trading platform with the Shanghai Futures Exchange (SHFE) as an investor.

The copper futures will start the formal trading on November 19, welcoming the overseas institutional investors to participate, according to a release by CSRC on October 23.

“Copper, a mature nonferrous product both in the physical and derivatives markets in China as well as in the world…will be a new proactive approach by China to continue with its opening to the overseas and to better satisfy the related enterprises’ needs for hedging and risk management, CSRC explained.

China is the world’s largest copper concentrates importer and refined copper producer, consumer and importer, CSRC added, though the contract specifications will remain the same.

One day earlier on October 22, DCE also released a notice collecting the market feedback regarding the overseas institutional investors’ participation in its RBD palm olein futures trading until October 30.

If launched, the palm olein futures will be DCE’s second contract after the iron ore futures to be open to the international investors, Mysteel Global understands, or the third for the country including INE’s crude oil.

DCE, since its opening the iron ore futures to the international investors on May 4 2018, have welcomed 288 overseas accounts from 20 countries and regions by the end of September 2020, which contributed to 5.6% of the daily trading volume and 2.7% of the daily open interests, a DCE official shared on October 22 at Mysteel Global’s webinar.

Written by Hongmei Li, li.hongmei@mysteel.com