Your browser version is too low.
Please use IE9+, Chrome or Safari to browse this website.
APP
Exchange News
Exchange of Futures for Physicals (EFP) on China Government Bond Futures Officially Launched Today
On January 17, China Financial Futures Exchange (CFFEX) officially launched the exchange of futures for physicals (EFP) on China Government Bond futures (CGB), which marks an important step in China’s financial futures market reform, innovation and development. CFFEX Board Chairman Hu Zheng along with other guests attended the launching ceremony and jointly inaugurated this new mechanism.
Li Jun, Deputy Director of Shanghai Municipal Finance Bureau, remarked that launching the EFP on CGB futures is an important step for CFFEX in aligning with world-class financial derivatives markets and improving its trading mechanisms. EFP will satisfy investors’ needs for customized risk management, diversified trading strategies, and higher market efficiency. It will also play a significance role in enabling CGB futures to better serve the cash market and the real economy.
CFFEX CEO Rong Zhiping expressed his appreciation to all stakeholders for supporting China’s financial futures market development over the years, and pledged that CFFEX will continue to promote service and product innovation, including developing 30Y CGB futures and CGB options on futures, and improve trading mechanisms to attract institutional investors. CFFEX will further support the real economy through the CGB derivatives market, and help prevent major financial risks.
Representatives from market institutions widely agreed that as a supplement to centralized trading, EFP will enable the direct exchange of futures for cash positions and strengthen the correlation between the two markets, thus reducing basis risk. Since CGB futures market is a specialized market where institutional investors hold sway, the mechanism will also address investors’ need for price negotiation and flexibility, give full play to the risk management function of CGB futures, and safeguard stable and sound market development.
The first EFP transaction on CGB futures was concluded between two institutions from Beijing and Shenzhen at 9:15 with a trading volume of 50 contracts.
The launching ceremony was attended by representatives from the Shanghai Municipal Finance Bureau, the China Central Depository & Clearing Co., Ltd. (CCDC), banks, securities firms, fund companies, asset management companies, futures companies, currency brokers, financial information service providers, and other market institutions; as well as members of the press.
