The China Financial Futures Exchange (CFFEX) yesterday said the
China Securities Regulatory Commission has approved the trading
rules, a crucial step toward the launch of the mainland's first
index futures market.
CFFEX has said there is no specific target date for the launch,
but industry insiders have predicted it will be sometime this
year.
The approved trading rules cover trading practices, clearing
procedures, members' rights and obligations, risk control,
information management, hedging operations and the investigation of
and penalties for irregular trading.
The contract specifications for CSI300 futures as disclosed
earlier defined the contract size, contract multiplier, tick value,
margin requirement, daily price swing limits, final trading day and
delivery date.
Each point of the CSI Index, on which the contract is based, is
valued at 300 yuan (US$39.39), and the margin level of trading is
set at 10 percent of the contract value.
Based on the closing price of 4040.48 for the CSI300 index
yesterday, the value of one futures contract is 1.2 million yuan
and the margin charged for each contract is 121,000 yuan
(US$5,888.65).
The tick value, or the minimum price movement registered, is set
at 0.2 points while the daily price rise and fall limit is set at
10 percent of the settlement price on the previous trading day.
It is widely believed that the approval of the trading rules has
cleared one of the final hurdles in the long preparation process
that has tested the patience of many prospective participants,
particularly institutional investors who would welcome an effective
hedging instrument to minimize risks in an increasingly volatile
stock market.
The assessment of members' qualifications is expected to be the
next focus for CFFEX in coming months.
(China Daily June 28, 2007)