China Eases Restrictions on Stock Index Futures Trading
Liao Shumin
/SOURCE : yicai
China Eases Restrictions on Stock Index Futures Trading

(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. 

Follow Yicai Global on
Keywords: Stock Index Futures , China Financial Futures Exchange