CHINA’S financial futures exchange said Friday it was further relaxing index futures trading rules, reducing margin requirements, cutting fees and allowing more trading activities. The China Financial Futures Exchange said in a statement the rule change, which will take effect today, is aimed at meeting investors’ risk-hedging needs and will help introduce more long-term capital into the market. The margin ratio for small cap CSI500 index futures would be lowered to 12 percent from 15 percent. Intraday activity exceeding 500 lots on a single index futures contract would be considered excessive, according to the new guidelines, as opposed to 50 lots previously. In addition, transaction fees for closing intraday positions will be lowered. China’s stock market has seen a surge of inflows from foreign investors, who have been urging Chinese regulators to provide more hedging tools and foster a more liquid derivatives market. China was once home to the world’s most active index futures market. Regulators tightened stock index futures trading in 2015 to curb speculation and stabilize the market following a stock market plunge. The curbs had once helped stabilize the capital market and prevent further losses, but restrained liquidity and functions of the stock index futures and regulators have been gradually relaxing rules over the past two years. China launched the stock index futures in 2010 to boost the capital market, allowing investors to hedge risks and ease fluctuations in the market. (SD-Agencies) |