(Yicai Global) June 19 -- Policies currently restrict commercial bank, insurance company and pension fund participation in futures markets.
China's securities regulator will continue to actively study abolition of these policy restrictions with other relevant departments, and examine ways for commercial banks, insurance companies and other financial institutions to utilize futures markets for asset allocation under the premise of risk control in an orderly manner, said Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC).
He made the above remarks on his speech at the 2017 China Wealth Forum held in Qingdao June 17. China's securities and futures business institutions have developed over-the-counter commodity options, and forward derivatives, but the overall size is small, which is insufficient to meet the needs of wealth management institutions' risk management. China should improve the comprehensive competitiveness of its securities and futures business institutions, and steadily develop the OTC derivatives market to promote the development of allocation of wealth management from standardization to individualization and diversification.
The country will continue to improve construction of its futures varieties system to satisfy diverse wealth-management needs. China's existing listed futures options varieties have reached 54, basically covering the main areas of the national economy such as agricultural products, metals, energy, chemicals and finance, but gaps for development in areas such as the varieties for some strategic resources and commodity index still exist. The country will list crude oil futures, and continue to carry out the study of futures varieties, such as natural gas. Commodity options varieties will gradually expand per the premise of smooth operation of soybean meal and sugar options.
The country will accelerate the opening of its futures market to realize global deployment of wealth management. Although some domestic futures contracts trade volumes are in the global top rankings, they still lack international pricing power. To speed the opening of China's futures market and encourage global wealth management institutions to include it into their scope of allocation will help to promote the international influence of the domestic futures market. CSRC will start from crude oil, iron ore and other more internationalized varieties, before gradually introducing foreign investors to use domestic commodity futures market for asset allocation. The country will improve its delivery transactional efficiency to support futures exchanges to set up delivery warehouses and overseas offices, and promote the improvement of bonded delivery related policies. The country will gradually push domestic commodity futures prices to become benchmarks in the Asia-Pacific region and even the world, forming an open and transparent 'China price.'