China all set to launch stock-index futures

Mumbai: Preparations for setting up China''s first stock-index futures have been basically finished, Shang Fulin, head of the country''s securities market regulator, said.

Shang, chairman of the China Securities Regulatory Commission (CSRC), said preparations in terms of technology and mechanism are near completion, but he did not give a specific date for putting the futures into operation.

"Stock-index futures is a big issue for China''s capital market," he said, noting that China still lacks the experience in derivative financial products. Investors still need to get prepared, he said, adding that it will debut "when the conditions are ripe."

The stock-index futures is usually used as a tool against drastic fluctuations in the stock market.

Shang was addressing a plenary session at the inaugural annual meeting of the `New Champions'' hosted by the World Economic Forum in China''s northeastern coastal city of Dalian.

Media reports said qualified foreign institutional investors (QFII) would be authorised to participate in stock-index futures trading in China, but the China regulator declined to comment.

Shang, however, assured foreign investors that the CSRC will resume the approval of Sino-foreign securities joint ventures.

"Allowing foreign capital into China''s securities business will help promote the capabilities of the whole industry," he said, adding that the commission is engaged in research on the resumption.