Chinese authorities approved the experimental launch of futures on stock indexes

China”s State Council has approved a pilot launch of futures on stock indexes, as well as margin trading and sales of securities without the coating. In addition to the natural risk insurance, a new government initiative could stimulate growth in the stock markets, as well as increase the value of Chinese securities markets, reports China Central Television (CCTV).

representative of the Chinese Committee for Control of securities reported that China”s State Council approved the draft of the pilot launch of margin trading and futures on stock indexes. The initiative will begin to put into practice within three months.

Margin trading - ie trading operations with funds provided by the broker in a loan secured by a specified amount - will be launched in test mode. If no unforeseen difficulties will not arise, it will gradually expand. Information about exactly when it will pass - the Committee is not currently published.

Starting

index futures will symbolize the beginning of the first series of derivative products specifically for trading on the Shanghai Futures Exchange, which was founded in 2006. At the starting stage based on it should be withdrawn derivatives, ie futures and options, but plans had to be postponed due to severe recession in the financial sites around the world.

lack of available tools to control risks in the Chinese stock market has recently become more acutely felt. To resolve this problem, the central government to quickly develop a set of measures that will significantly improve the functioning of securities markets, as well as their attractiveness to the broad investor community.