China Sets Threshold for Individuals to Trade Index Futures -Shanghai Metals Market

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China Sets Threshold for Individuals to Trade Index Futures

Data Analysis 09:06:07AM Jan 18, 2010 Source:SMM

BEIJING, Jan. 18 -- Any individual who wants to trade stock index futures must have 500,000 yuan (73,206 U.S. dollars) in minimum to open an account, said the Shanghai-based China Financial Futures Exchange (CFFE) on Friday.

Besides funds, an individual investor must pass an exam and has certain records on futures trade to participate in the investment, a CFFE spokesman said.

The Chinese Securities Regulatory Commission also issued draft regulations on requirements for stocks index futures investors Friday to solicit public opinions.

Compared with stocks and bonds, stock index futures are of higher risks and thus dealers must have enough special knowledge, funds and capacities to stand risks, said a spokesperson for the commission.

The regulations aimed to protect investors, especially small ones, the spokesperson said.

China's securities regulator on Jan. 12 approved the CFFE to undertake stock index futures trade.

The State Council on Jan. 8 approved "in principle" the launch of stock index futures.

Stock index futures are an agreement to buy or sell an index at a preset value on an agreed date. Index futures would give investors a mechanism to profit from declines in stock prices, allowing them to hedge risks and helping ease fluctuations in the market.

China Sets Threshold for Individuals to Trade Index Futures

Data Analysis 09:06:07AM Jan 18, 2010 Source:SMM

BEIJING, Jan. 18 -- Any individual who wants to trade stock index futures must have 500,000 yuan (73,206 U.S. dollars) in minimum to open an account, said the Shanghai-based China Financial Futures Exchange (CFFE) on Friday.

Besides funds, an individual investor must pass an exam and has certain records on futures trade to participate in the investment, a CFFE spokesman said.

The Chinese Securities Regulatory Commission also issued draft regulations on requirements for stocks index futures investors Friday to solicit public opinions.

Compared with stocks and bonds, stock index futures are of higher risks and thus dealers must have enough special knowledge, funds and capacities to stand risks, said a spokesperson for the commission.

The regulations aimed to protect investors, especially small ones, the spokesperson said.

China's securities regulator on Jan. 12 approved the CFFE to undertake stock index futures trade.

The State Council on Jan. 8 approved "in principle" the launch of stock index futures.

Stock index futures are an agreement to buy or sell an index at a preset value on an agreed date. Index futures would give investors a mechanism to profit from declines in stock prices, allowing them to hedge risks and helping ease fluctuations in the market.