Futures News
- More mainland futures firms to open branches in Hong Kong
Date: 22-Jan-2007 Sources: (Xinhua Online)
Five more mainland futures firms are expected to open branches in Hong Kong in the first half of this year, company sources have said.
The firms are Green Futures, Zhejiang Yong'an Futures, GF Futures, Jinrui Futures and Nanhua Futures, all of which were approved by the China Securities Regulatory Commission (CSRC) in March last year to do business in Hong Kong.
'Everything is ready for the launch of a branch in Hong Kong, and we're waiting for the approval of the Hong Kong Stock Exchange,' said Wang Shuaihong, chairman of the Green Futures.
Wang could not give a specific date for the launch of a Hong Kong branch, but was confident they could begin business in Hong Kong soon. He would give no further information.
Xiao Cheng, general manager of GF Futures, said they were also waiting for a go-ahead, adding the Hong Kong branch was expected to go into operation in the first half of this year.
Zhejiang Yong'an Futures has obtained a license for its Hong Kong subsidiary and was going through final procedures, company sources said.
Jiang Changwu, general manager of Jinrui Futures, said Jinrui's Hong Kong subsidiary would go into operation in the first quarter this year as preparations are proceeding smoothly.
The CSRC allowed the five companies to do futures businesses in Hong Kong in accordance with the mainland's Closer Economic Partnership Arrangement (CEPA) with Hong Kong.
China International Futures Co., Ltd. is another mainland futures firm approved by CSRC to do business in Hong Kong.
China International Futures' subsidiary in Hong Kong went into operation on Dec. 28 last year, becoming the first mainland futures firm to do business in Hong Kong.
Tian Yuan, chairman of China International Futures, said the branch operation was a milestone in China's futures industry history.
Mainland futures firms are legally required to have a clean business record and annual average futures deposits with the top 30 in the industry to do business in Hong Kong.
The firms are also required to have made a profit for three of the past five years, and have a minimum registered capital of 50 million yuan (6.4 million U.S. dollars). Good corporate governance standards and risk management practices are also requirements.
Under CEPA regulations, mainland subsidiaries in Hong Kong are prohibited from acting as agents for domestic companies that want to carry out futures trading overseas and they are banned from acting as agents for overseas investors to do futures business on the domestic market.
A source with the China International Futures said its Hong Kong subsidiary would mainly serve as a channel for domestic and overseas investors, especially overseas Chinese.
Insiders expect the revised regulations on futures trading, which are yet to be issued, would loosen controls on domestic futures firms that plan to do business overseas.
According to the China Futures Industry Association, China's futures turnover hit a record 21 trillion yuan last year, up 56.23percent year-on-year. China has 183 futures firms.
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