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|Friday, February 02, 2001, updated at 09:25(GMT+8)|
Chinese Futures Association EstablishedThe Chinese Futures Association was established on December 29, 2000. Tian Yuan, President of China International Broker Co. Ltd., the biggest futures company in China, was named Chairman, according to Beijing Review.
The Chinese Futures Association was initially registered in 1995, Tian Yuan noted. Because the government decided to scale back the futures industry, the plan to found the association had to be postponed. The legal position of futures was defined, following the State Council 's promulgation of Measures for the Management of Futures and four other related measures.
The Futures Association will strengthen the management of this industry and establish rules to regulate members. These rules will include operating practices and a self-regulation protocol. For instance, if a futures company lowers its service charges by a great amount, other members could sue it and the association would settle the problem to end harmful competition.
The current members consist of futures agencies and exchanges. In China, the futures market is in decline and invaded commodities are limited to agricultural products and metals. Thus most futures agents are losing money. The founding of the association will promote market development.
Tian Yuan thinks futures transactions are not suitable for the general public but for serious investors. In China, stock and fund brokerages can 't participate in futures transactions.
In the next several years, many changes focusing on the system and types of commodities will appear in the futures market. This year, new commodities will emerge. The business of futures companies will diversify and market principles will be enforced. At present, Chinese futures companies only act as agents and can 't do business like their foreign counterparts. Tian Yuan predicts that domestic companies will operate like foreign futures companies after China enters the WTO.
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