Economic Daily: Futures Market to Better Support Open Economy

Updated on May 29,2015

By Wen Jicong

Shanghai, May 28. At the 12th Shanghai Derivatives Market Forum held today in Shanghai, Yao Gang, Vice Chairman of the China Securities Regulatory Commission (CSRC), said that with the reforms of the futures market continuously carried out and the operational quality of the futures market constantly improved, the CSRC is currently studying the overall strategy and implementation steps for the opening up of the capital market including the futures and derivatives market.

Yao said that the CSRC will deepen the implementation of the requirements of the new “State Nine Opinions”, accelerate reform and innovation, and make efforts to build an open, inclusive, competitive and cooperative futures and derivatives market, so as to better serve the development of the open economy. In the future, the CSRC will promote the work in the following aspects:

First, we will advance the innovation in the market more rapidly so as to support the “new normal” of the economic development. We will optimize the mechanism of listing new futures products, making efforts to develop new products and instruments meeting the market demands and improve the system of the futures and derivatives market. We will vigorously make preparations and coordinate all parties concerned to ensure the smooth listing and safe operation of the crude oil futures. We will develop the commodity options market by implementing the pilot for the stock index options. In order to meet the diversified and individualized demands of the real economy for risk management and pricing, we will create the conditions for the development of the OTC derivatives market. The establishment of the trader system will be explored and the group of traders will be cultivated. We will energetically push forward the innovative development of the futures business institutions.

Second, we will actively promote the opening-up and cooperation and support the “One Belt and One Road” strategy. We will study the overall strategy and implementation steps of the opening up of the futures and derivatives market. We will make a breakthrough from the crude oil futures and gradually introduce foreign investors to participate in China's futures market. We will study and advance various means of opening up including contracts and authorization of the settlement prices of the contracts. We will take full advantage of both domestic and international markets and resources, and strengthen exchanges and cooperation with the regions related to the “One Belt and One Road”.

Third, we will focus on the regulatory transformation and effectively enhance regulatory efficiency. We will continue to deepen decentralization, remarkably intensify the supervision in and after the process, and improve the multi-level system of risk monitoring, early warning, prevention and control. We will make innovation in regulatory philosophy and methods, strengthen market supervision, crack down on market manipulation and other illegal activities, and safeguard an “open, fair and just” market and the investors' legitimate rights and interests. We will further press ahead with the reform of the regulatory system, optimize the market rules, reduce the market costs and improve the market efficiency. We will make further efforts in the legislation of the “Futures Law”.

Fourth, we will consolidate the foundation of the market and optimize the soft environment for the market development. We will make effective research in the impact of China’s futures market on the economy organized by the NPC Financial and Economic Committee and the CSRC. In addition, we will continue to deepen the cultivation of the market, make efforts in rationalizing and removing all unnecessary restrictions, and actively guide the investors with the demand for risk management, especially the industrial enterprises and financial institutions, in entering the market to trade. We will strengthen the risk education for the investors, publicity and guidance of public opinions.

Yao said that in recent years, China's futures and derivatives market has gained a good momentum of development, playing an increasingly important strategic role in supporting the transformation and development of the real economy and deepening the reform of the financial market.

The total number of the futures products has reached 52 in China, basically covering agriculture, metals, energy, chemicals, finance, and other major fields of national economy. Meanwhile, the futures market has seen the reform of the systems and rules continuously stepped up, with the market vitality further unleashed and the operational quality of the market constantly improved.