CHINA SECURITIES JOURNAL: THE SHFE PREPARES FOR LISTING OF CRUDE OIL FUTURES

Updated on Jun 18,2014

June 18, 2014

By Guan Ping

With regard to members’ questions on product innovation, business innovation, institutional innovation, policy interpretation, process optimization, and technology upgrading, the Shanghai Futures Exchange (SHFE) pointed out, in the “Concentrated Reply to Opinions and Suggestions at the 2014 Regional Members Symposium” released through its member service system, that it will actively develop the derivatives business of commodity futures, prepare for the listing of crude oil futures, and promote the early opening-up of qualified products.

In the reply, the SHFE pointed out that it will first, according to the development situation and strategic planning of the market, keep promoting the serialization and diversity of products and refine the listed products. For example, the SHFE plans to refer to the mature practices of overseas markets, study spread trading and other forms, and further enhance the continuity of gold contracts and others in brisk months; and it will also actively explore the feasibility of listing imported No. 20 standard rubber for trading.

It will, secondly, pay great attention to the service and covering capacity of the industry and keep deepening and expanding the width and depth of serving the national economy. For example, it will research the setting up of warehouses in other areas and the premiums and discounts of warehouses in other areas, and it will adopt various measures to reduce the trading cost and the capital occupation cost of industry customers.

It will, thirdly, keep improving futures market’s operational mechanism, trading platform, and institutional construction and acting on international conventions in concepts, systems, rules, services, risk control, and technologies. For example, it will continuously trace the fluctuation ratio of listed contracts and the margin adjustment in international market, analyze the market risks comprehensively, and adjust the margin level appropriately under the sharp market fluctuation; it will also continue to exploit the potentialities of the single-side larger-amount margin system and make research in cross-product offset, options and futures offset, and other measures; and it will further research and improve the system of offsetting margin with negotiable securities.

The SHFE said that it will actively develop the derivatives business of commodity futures, optimize investor structure, seize the opportunity to implement the opening-up strategy, and accelerate the pace of being integrated into the international market. Besides, it will actively handle industry reform and encourage and guide innovative development. For example, it will prepare for the listing of crude oil futures, usher in overseas investors, and promote the early opening-up of qualified products.