Date：January 5, 2015
Source: Futures Daily

1. New “Nine Opinions” prepares blueprint for the futures market development
“Some Opinions of the State Council on Further Propelling Sound Growth of the Capital Market” was released on May 9. Compared with the version in 2014, which focused on standard and regulation, this new version puts emphasis on support and innovation, suggests “expanding futures market”. This could become a milestone for the transformation and development of China’s futures market as well as the exertion of its functions.
2. Second draft of “Futures Law” in place
Based on legislation survey and subject research, the “Futures Law” team from NPC Financial and Economic Committee summarized learning and experiences, conducted in-depth analysis of existing issues and referred to local and foreign practices to complete the 2nd draft of “Futures Law” last August. Now the legislation of Futures Law is in steady progress.
3. Release of “Opinions on Futures Innovative Development”
China Securities Regulatory Commission (CSRC) released “Some Opinions on Further Propelling Innovative Growth of Futures Operation Institutions” on September 16. It includes 8 articles, with enhancing competitiveness and serving real economy as the major clue. Besides, it offers 8 major measures for innovative development of futures institutions.
Futures Innovation Meeting discussing the “Some Opinions” was held in Beijing on September 17.
4. First International crude oil product approved
Futures product innovation was in steady progress in 2014 with the launch of 5 new products including late indica rice, ferroalloy, polypropylene, corn starch and hot rolled coils.
CSRC approved on December 12 of Shanghai Futures Exchange (SHFE)’s launch of crude oil futures trading in its Shanghai International Energy Exchange Corporation. As the 1st international futures product in China, crude oil futures will develop an international settlement platform and introduce traders and brokers both at home and abroad, which will strengthen China’s futures market’s opening to the global environment.
5. Expansion of products traded in after-hours session
After the launch of after-hours trading by SHFE in 2013, the after-hours trading of another 17 products were launched in 3 batches by 3 major commodity exchanges in 2014. By now, 23 products have been traded in after-hours session, accounting for 50% of listed futures products.
6. Restrictions on futures companies’ asset management lifted
The “one-to-many” business has been allowed since the “Regulations on Futures Companies’ Asset Management Business (Trial)” was released on December 4. There is a lower threshold for futures companies to carry out asset management business. By the end of 2014, there were already futures companies completing the registration for their “one-to-many” asset management products.
7. Supporting details tend to be perfected for risk management companies
According to the “Guidance for Futures Company to Establish Subsidiaries to Pilot their Risk Management Services” and relevant supporting documents released on August 26, new businesses such as market making were added on the basis of the former 4 fundamental businesses. Previously, “Major Protocol on OTC Derivatives Trading in Securities and Futures Market” was released to standardize OTC derivatives trading.
Risk management companies are exploring OTC business models. They not only design OTC option products, participate in swaps trading, but also take part in the operation of OTC commodity trading platforms by taking a stake.
By the end of 2014, a total of 33 risk management companies had already completed their registration.
8. M&A rises again in futures industry
M&A rose again in China’s futures industry in 2014. Apart from Jiangnan Futures merged with AVIC Futures, Jingyi Futures merged with Minmetals Futures, CITIC Newedge Futures merged with CITIC futures, there also have CCB Futures and China Industrial Futures, both with bank background, as well as Chaos Ternary Futures with large-scale private equity as holding party.
9. Implementation of ETF guidance for commodities
“No.1 Operation Guidance for Securities Investment Fund through Public Offering - Guidance for Commodities Futures ETF” was released on December 16. The launch of commodities EFT will bring connections to securities and commodity markets and improve investor structure of commodity futures market and increase market capacity, enriching investment and hedging tools.
Ever increasing commodity futures indices also provide ample investment tracking target. At present, some fund companies are going through product application formalities.
10. “Open Account via Mobile Phone”: the ice breaker
On February 18, CES Futures announced that it would launch the service of opening account through mobile phone with “zero commission”, which caused a discussion of the arrival of internet finance. Though it was put to an end soon by regulators, the “Opinions on Innovative Development of Futures” released later stated that futures companies should explore to develop the service of opening account online. According to China Futures Margin Monitoring Center, it will research and develop “cloud platform for account opening online”. Now, related principles and guidance in this regard are in preparation.