As China prepares for the launch of equity index futures, the authorities are taking a careful approach to reform, argues Dean Owen, chief China representative at futures broker Newedge.
The China Financial Futures Exchange (CFFEX) is on the
verge of launching the widely anticipated futures on the CSI
300 index of leading Shanghai and Shenzhen stocks in the second
quarter of this year.
According to a posting on the China Securities Regulatory
Commission’s website on January 8, it may take
three months to prepare for the launch.
Yet that belies the real time it has taken to develop this
product. It was back in December 2001 that the then director of
the CSRC’s futures division announced preparations
were under way to launch an equity index future.
In January this year, more than eight years later, CFFEX was
granted "in principle" approval by the State Council to launch
its long-planned CSI 300 Index Futures. These have been trading
in mock conditions at CFFEX since October 2006.
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