500,000 yuan needed to trade on China's index futures

09:25, January 12, 2010      

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China has approved the launch of index futures and individual investors must have a minimum of 500,000 yuan ($73,000) to trade stock index futures, according to a China Securities Journal report citing unidentified officials at the China Securities Regulatory Commission (CSRC).

Also, the individual investors must have experience in futures trading and simulated trading of index futures.

Investors will also be required to complete a training course and pass a test before they are allowed to trade the index futures.

The trial program will select brokerages from the 11 Chinese brokerages that joined a network testing the program in 2008.

The 11 brokerages are: Citic Securities, Haitong Securities, Everbright Securities, China Merchants Securities, Guotai Junan Securities, Shenyin & Wanguo Securities, Guosen Securities, GF Securities, China Galaxy Securities, Huatai Securities, and Oriental Securities.

China approved the launch of stock index futures as well as short selling and margin trading of stocks Friday.

Its introduction was aimed to boost the stable and healthy development of the capital market, said an unnamed official with the CSRC.

Analysts said the launch of index futures would help lift blue chips and investors would have tools to hedge or speculate. Li Xunlei, chief economist with Guotai Junan Securities said the index futures would lead to more capital invested in blue chip stocks.

According to the CRSC, index futures will take about three months to start up, while the trial period for margin trading and short selling will begin shortly.

Source: Global Times
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