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10 Trust Firms to Trade Stock Index Futures
The first batch of ten trust companies, including Shanghai Trust Co Ltd, Huarun Trust Co Ltd, and Hwabao Trust Co Ltd, will trade the stock index futures, China Securities Journal reported Wednesday, citing a relevant source.
The China Banking Regulatory Commission (CBRC) will soon release guidelines allowing trust companies in China to trade stock index futures, said Min Luhao, a senior official with the commission, on June 17 in Shanghai.
An executive officer from a trust firm in Shanghai told the reporter that they had not received any notice from the regulatory commission but he revealed "if only 10 firms will enter the lists, our company must be one of them".
The criterion for trust companies to trade the stock index futures is quite strict, requiring a rigid internal control and risk management system, specialized professional team, complete IT system, and the company must have a rating of three or above by the regulator. In addition, the guidelines also stipulate the details of the trading rules.
"It will add a new risk-hedging tool for us and will help us to develop new types of risk-return products, whether investing ourselves or providing trust services for our clients" he added.
The futures and private equity industries support trust firms to participate in the trading of stock index futures as private equity fund can not trade the futures directly.
"The private equity fund will develop more attractive wealth management products through the channeling of trust firms and their involvement in futures trading", said Gan Zheng, vice president of Shenyin & Wanguo Futures Co Ltd.
Source:China Daily
