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- Rules set on financial futures settlement
Date: 24-Apr-2007 Sources: (Shenzhen Daily)
THE securities regulator has detailed rules related to settlement service and brokering business for financial futures, a move that brings the start of trading in products like stock index futures in China another step closer.
The two new regulations were issued on the Web site of the China Securities Regulatory Commission over the weekend and went into effect immediately.
The government has been expected to launch stock index futures trading in the early part of this year after experimenting with mock trading in the contracts late last year. Already regulators have updated existing futures trading regulations to encompass financial futures trading from commodity futures trading and issued draft rules on stock index futures trading.
A futures firm can apply to the commission to handle full settlement services or trading settlement services of financial futures, under the regulation detailing settlement services of financial futures by a futures company.
The rules for settlement services apply to futures firms that are members of the China Financial Futures Exchange.
Trading settlement applies to exchange members, which can offer settlement services to clients, while full settlement services allow a member futures company to offer settlement services for non-exchange members.
The rules detail application requirements, business scope and supervisory responsibility for settlement services of financial futures. The requirements cover profitability criteria, minimum net asset levels and operational history and violation disclosures for a futures firm.
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