CSRC eyes commodity futures trade
Print Edition
CHINA’S top securities regulator said yesterday that it will tighten its oversight of commodity futures trading in a bid to clamp down on speculation, and also vowed to open up the commodity-derivatives market to offshore investors to help it become a price-maker on a global scale.
“Recently, domestic markets have seen excessive trading volume and wild price swings in some commodity futures,” Fang Xinghai, vice chairman of China Securities Regulatory Commission, told a derivatives market forum at the Shanghai Futures Exchange.
“We’ve guided exchanges to take a number of measures targeting speculative activities,” he said.
A speculative frenzy in March and April sparked a surge in the prices of China’s steel, rebar, coking coal and iron ore futures. That was followed by a rapid slide after the regulator intervened and introduced a slew of cooling measures, such as tightening trading rules, raising transaction fees and barring suspicious accounts from trading.
“The measures have achieved a notable effect, and exchanges should keep a close eye on commodity futures trading to crack down on illegal activities and maintain order,” Fang said.
China is planning to introduce more commodity derivatives, such as crude oil futures, and open the market to offshore investors as part of an effort to become a global pricing center, the official said.
“A large number of international companies are engaged in spot transactions of commodities in China, and they have been calling for admission to futures trading in order to hedge risks,” he said.
“China will gradually open up its futures markets, starting with internationally traded products such as crude oil, iron ore and rubber.”
The regulator said it is also considering allowing banks and other financial institutions to trade in more commodity futures to meet the rising demand for hedging and asset allocations. Currently, banks are only allowed to trade gold and silver futures.
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