ETF options could be launched in China as soon as this month
as the country gears up for the full launch of options trading,
a leading lawyer has said.
China is undergoing a widespread reform of its financial
markets as it seeks to build Shanghai as a global financial
centre and develop its capital markets.
The launch of options is seen as a key step in that
development and the country’s main derivatives
exchanges have been running mock trading since 2012.
Natasha Xie, a partner at the JunHe law firm and a key
figure in the local derivatives market, said that some Chinese
observers believe that ETF options could be launched this
In a recent press conference, Dang Ge, the press secretary
of the China Securities Regulatory Commission, said that ETF
options will be launched on the Shanghai Stock Exchange (SSE)
He later denied reports that the launch would be delayed
Hong Kong Shanghai Stock Connect Scheme had been
implemented, which is scheduled for October.
"Mock trading of the SSE’s ETF options has been
stable and ongoing since June 2012. In July 2014, the SSE
issued the Guidance on Risk Control for Security Companies in
Operating ETF Option Brokerage Business, which provides
requirements in terms of margin management, position limits,
and risk management," said Xie.
"As of June 2014, the SSE had finished site inspection of 67
members on their options trading and technology capacity. The
first ETF options pilot program will include SSE 50 ETF options
and SSE 180 ETF options."
The launch of ETF options is expected to be followed by the
launch of stock index options on the CSI 300 index traded on
the China Financial Futures Exchange (CFFEX).
Xie said that CFFEX had completed preparations to list index
options and is currently reviewing plans to offer portfolio
margining to increase margin efficiency when trading
The Shenzhen Stock Exchange is also planning a launch this
year and will start testing its systems in September with a
view to launching SZSE 100 ETF options and SME Board ETF
options this year.
In April, Liu Xingqiang, the General Manager of the Dalian
Commodity Exchange, said it would launch commodity options, at
the earliest, within this year.
The Shanghai Futures Exchange is also developing plans to
launch gold options before the end of the year.
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