(Yicai Global) Dec. 3 -- Chinese regulators aim to boost futures markets trading by further relaxing rules for a third time, this time reducing margin requirements and reducing fees.
China Financial Futures Exchange will lower the margin requirement for the Shanghai Stock Exchange 50 and Hushen 300 index futures from 15 percent to 10 percent, the Shanghai-based board said in a statement. The requirement for the SSE 500 index has also been halved to 15 percent.
Commission fees for intra-day position-closing will be lowered from 0.069 percent of the transaction value to 0.046 percent.
The exchange has also raised the intraday trading limit on a single index futures contract by non-hedging accounts from 20 lots to 50 lots, with anything above considered abnormal. Hedging transactions will be excluded from this restriction.
The CSRC is also actively preparing for foreign investments in domestic futures companies and will encourage foreign institutions to take part in futures trading through mechanisms like the Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors mechanisms, Vice-President Fang Xinghai said at the 14th China International Derivatives Forum on Dec. 1 in Shenzhen.
The latest easing of rules follows two relaxations last year, aimed at preventing abnormal fluctuations, enhancing trading activity and promoting the function of stock index futures.
The first set of major adjustments in the futures sector came in in February 2017, while the second batch of changes, made in September last year, lowered the margin requirements for the HS 300 and SSE 50 contracts from 20 percent to 15 percent. The new policies also cut the rate of commission for settling intra-day open positions in contracts on the SSE 50 and CSI 500 from the original 0.092 percent of turnover to 0.069 percent.
China's stock index futures sector posted rapid growth from 2010 to 2015 with a respective trading volume and turnover of 220 million and CNY163.1 trillion (USD23.5 trillion) in 2014. The Hushen 300 has become the second-largest futures index globally in terms of trading volume and turnover per single product.
China listed the SSE 50 and CSI 500 in April 2015, and transactions, as well as the number of participants, increased significantly. They have become important tools for market participants to allocate assets and prevent risks.