Futures contracts regulations expected
By Li Xiaowei (China Daily)
Updated: 2006-06-20 08:58
To become a full clearing member of the proposed futures exchange, a company
must have a minimum registered capital of 100 million yuan (US$12.5 million),
instead of 200 million yuan as earlier reported.
To conduct broking for
clients, securities firms need to either acquire a futures trading subsidiary or
register all clients as full members of the proposed futures exchange.
To
prepare themselves for trading, talks are now being held between securities
firms and futures companies, according to industry insiders.
"The
introduction of index futures contracts will considerably increase M&As
among securities firms and futures companies," said Dang Jian, president of
Shanghai CIFCO Futures Brokerage Co.
Stock market sources expect stock
index futures trading could generate a turnover of twice the amount of money
traded in stocks. This could amount to as much as 8 trillion yuan (US$1
trillion).
Given that commission fees would be charged at 1/10,000th of
the transaction value, trading could produce as much as 800 million yuan (US$100
million) in income for brokers.
The index futures market is initially
likely to attract institutional investors such as mutual funds, social security
funds, insurance companies and Qualified Foreign Institutional
Investors.
(For more biz stories, please visit Industry Updates)
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