Financial Regulatory Forum

China set to cap funds’ trading in index futures

March 16, 2010

   SHANGHAI, March 16 (Reuters) – China’s securities regulator is set to clear only stocks-related mutual funds to trade in the country’s first stock index futures, ordering them to trade for hedging rather than speculative purposes, according to draft rules published on Tuesday.
   Bond and currency funds will not be able to invest in the futures, expected to be launched in mid-April, with the China Securities Regulatory Commission seeking to limit risks and control transactions involving new products.
   Any fund must not have long holdings that exceed 10 percent of its net assets, nor should it hold short positions that exceed 20 percent of the total value of its stock holdings.
   Other provisions include that the intraday value of contracts held by a fund must not exceed 20 percent of its previous day’s net asset value.
   The draft rules were published in official financial newspapers to gauge public opinion and are subject to change. (Reporting by Farah Master; Editing by Jonathan Hopfner) ((farah.master@thomsonreuters.com; +86 138 1627 2951; farah.master.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: CHINA INDEXFUTURES/
  
Tuesday, 16 March 2010 02:04:02RTRS [nTOE62F00K] {C}ENDS

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