The SFC Plans To Promote The Two-Way Opening Of The Futures Market At A High Level

"The more open the market is, the easier it will be for investors to participate, and the more numerous participants will be, the stronger the market competitiveness will be.". On December 19, Fang Xinghai, vice chairman of China Securities Regulatory Commission, said so at the 16th China (Shenzhen) International Futures conference.

In response to the opening of the futures market, Gao Li, a spokesman for the CSRC, once again said at the CSRC press conference on December 25 that various measures would be taken simultaneously to further expand the high-level two-way opening of the futures market. Gao Li said that in the future, focusing on the high-level two-way opening up of the futures market, the main work of the CSRC will be divided into two aspects: "bringing in" and "going out".

Among them, "bringing in" will include expanding the scope of specific varieties, optimizing the institutional environment, and enhancing the participation of overseas traders. "Going global" mainly refers to further supporting domestic futures exchanges to carry out authorized cooperation in settlement price with overseas exchanges and overseas financial institutions, and supporting domestic qualified futures companies to establish futures business institutions for acquiring and participating in overseas futures.

Han Qian, a professor at Xiamen University's School of economics, said that in recent years, the two-way opening up of the futures market has continued to advance, and good progress has been made, such as liberating the holding proportion of foreign investors, expanding the scope of investment, introducing more domestic specific varieties, and the pulp futures settlement price authorization between Shanghai Futures Exchange and Norway. It is expected that in the future, financial futures will also be more open to the outside world, the cooperation modes between domestic and foreign exchanges will be more diversified, and the domestic and foreign futures companies will have more cooperation and development.

Continue to expand the scope of specific open varieties

For China's futures industry, 2020 is the year to promote high-quality two-way opening up. In June this year, low sulfur fuel oil futures were opened to the public simultaneously, and Shanghai international copper futures was officially listed in November. Just past December 22, Dalian Commodity Exchange officially introduced foreign investors to participate in palm oil futures trading. So far, there are 7 International Futures and options listed in China.

Gao Li disclosed on December 25 that in the future, the CSRC will continue to expand the scope of specific varieties, optimize the institutional environment, and enhance the participation of overseas traders.

"The internationalization of China's futures market, more importantly, will enable China's market prices to go out and become an influential market pricing reference in the international market." South China Futures chairman Luo Xufeng said.

For the opening up of domestic futures varieties, Hu Chaoyue, director of the Institute of securities and futures of Beijing Industrial and Commercial University, suggests that we should take the lead in opening up domestic and foreign varieties as well as domestic strong varieties. In addition, he suggested that we could consider promoting the internationalization of all futures varieties in the specific industry chain. "For example, the industrial chain of soybean, soybean oil and soybean meal, such as the ferrous metal industry chain. In terms of ferrous metals, there are basically none in the world. Only we have them. China not only has them, but also has strong ones. Can we internationalize the series of products? "

It is worth mentioning that in addition to the further opening of futures varieties, China's first foreign-funded wholly-owned futures company was also born in 2020.

On June 18, the CSRC approved the application of JPMorgan futures to change its equity. After the change, JP Morgan will hold 100% of the company's equity, and JP Morgan futures will become the first foreign-owned futures company in China. Gao Li said that in the future, the CSRC will support international institutions with good international reputation and business performance to participate in and hold shares in domestic companies. At the same time, it will further facilitate overseas personnel to work in China.

Although foreign holding futures companies have achieved "ice breaking", on the whole, the enthusiasm of foreign investors to participate in domestic futures business is not high.

In this regard, Han Qian analysis that this is closely related to the domestic futures industry ecology. He said that although the current business model of futures companies has begun to show a trend of diversification, it is mainly the brokerage business with serious homogenization. In this regard, foreign institutions have no advantages and foundation. Compared with securities, funds, banks and other institutions, the profit space of futures industry is relatively narrow. In the future, foreign capital may strengthen cooperation by holding shares or holding shares in domestic companies.

On the other hand, Han Qian pointed out that institutions in China's futures market as a whole still have room for improvement in terms of specialization, legal affairs and compliance. In the future, with the promulgation of the "Futures Law" and the promotion of internationalization, the enthusiasm of overseas institutions to participate in domestic futures business will be improved.

Futures exchanges and companies going global

Another aspect of the two-way opening up of the futures industry is "going out".

Gao Li pointed out that in the future, the CSRC will further support the authorized cooperation between domestic futures exchanges, overseas exchanges and overseas financial institutions in settlement price.

"This will expand the influence and authority of China's commodity futures in terms of pricing, marking the recognition of foreign exchanges for the operation quality of China's futures market." Han Qian said.

Huo Ruirong, general manager of China Financial Futures Exchange, recently disclosed that he was promoting the opening up of financial futures market. In terms of the belt and road initiative, CICC cooperated with the Pakistan stock exchange to assist in the implementation of the three-year business plan, launch the first batch of ETF products, do a good job in upgrading and upgrading the technical system, and promote the work of the Pakistan Stock Exchange on the right track. In the construction of China EU International Exchange, shareholders have been promoted to complete the internal approval of capital increase plan and submitted materials for approval. The post transaction transparency assessment of the third country trading place of European Securities and market authority (Esma) has been completed and formally included in the positive list of Esma.

In terms of "going global", Gao Li also disclosed that the CSRC would support qualified domestic futures companies to set up, acquire and participate in overseas futures business institutions. In addition, it will support domestic futures companies to increase capital to overseas subsidiaries in order to further enhance the capital strength of overseas subsidiaries and enhance cross-border service capabilities.

At present, it is common for domestic shareholders to increase capital for their futures companies, and overseas business of futures companies is also continuing. Ge Guodong, general manager of Yongan futures, said that as a financial service institution, futures companies have several accumulation in the process of going abroad: certain capital strength, talent team and good trade mode. Through cooperation with overseas subsidiaries and between overseas subsidiaries and domestic subsidiaries, the price of domestic bulk commodities should be brought to the world.

In this regard, Hu Guoyue further said that he hoped that through domestic futures companies, Chinese investors would be brought to the international market for "external trading".

"The more open the market is, the easier it will be for investors to participate, and the more numerous participants will be, the stronger the market competitiveness will be." Fang Xinghai recently said that it will continue to expand the scope of specific open varieties and broaden the market opening mode; further promote high-level institutional opening, pay more attention to the deep docking of institutional rules and international markets, create a fair, transparent and predictable institutional environment and rule system in a more efficient and consistent with international practices, and introduce more mature overseas institutional investors And foreign institutions to invest in China.