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China formally approves stock index futures rules
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China's securities watchdog has given the nod to the official rules for stock index futures trading. So far the basic rules for index futures have all been approved. The next move is expected to be the launch of investor registration.
An official from the China Securities Regulatory Commission says the final version of the regulations, effective immediately, is pretty much the same as the initial draft. But the margin requirement was raised from 10 percent to 12 percent, and speculative holding limits were cut by 80 percent to reduce leverage and curb risks.
China Financial Futures Exchange, the body set to handle the index futures, consulted public opinions from January 19th to 29th on the trading rules.
Despite some investors' calling for a lower capital threshold, the rules still impose tough requirements on those wishing to open trading accounts.
Any investors who want to trade on the stock index futures market must have a minimum of 500，000 yuan to open an account.
Investors must also have prior experience with mock trading of index futures for at least 10 trading days and must engage in at least 20 transactions. Or they must have had conducted at least 10 transactions at commodities futures markets over the past three years.
Analysts say the government's cautiousness is likely to rub on investors and make them wary of stock index futures initially.
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