THE securities regulator has relaxed certain rules on stock index futures trading as China starts to gradually unwind restrictions imposed during the 2015 stock market crash. Starting Friday, rules restricting “excessive trading” in stock index futures have been eased, doubling the previous daily cap of 10 contracts to 20. In addition, margin requirements and trading fees for the derivative trading have also been lowered. The announcement by the regulator late Thursday was immediately seen by some hedge fund managers as a positive harbinger for China’s thinly traded index futures market, but optimism was restrained. “Spring is coming. This is encouraging,” said Fang Ming, a senior executive at Shanghai-based hedge fund firm MingShi Investment. “But the moves are more symbolic in nature, and will give limited support to market liquidity,” he said, adding the new daily cap of 20 contracts is still too restrictive. China imposed a series of restrictions on stock index trading during the stock market crash in the summer of 2015, blaming the derivatives for worsening the crisis. As a result, trading in China’s stock index futures tumbled, nearly killing a market that provides much-needed hedging tools for investors in a volatile stock market. Thursday’s announcement shows the government is getting more confident of the stock market, which has gained more than 20 percent from a bottom hit a year ago, as the economy shows signs of recovery. Under the leadership of the China Securities Regulatory Commission (CSRC), the China Financial Futures Exchange has decided to adjust trading rules “in a gradual and orderly” manner, to enable market forces play a bigger role, according to an exchange statement, which was also posted by CSRC. Margin requirements for what is seen as speculative trading in CSI 300 Index Futures and SSE 50 Index Futures will be slashed to 20 percent, from 40 percent, while the requirements for trading in the CSI500 Index Futures will be reduced to 30 percent from 40 percent. (SD-Agencies) | 