A new Regulation on the Administration of Futures Trading aims to set up a centralized supervision system on the futures markets, including the commodity futures market and the financial futures markets.
Under the Regulation, a risk forewarning system will improve risk control mechanisms and protect the rights and interests of investors. The Regulation also sets out the duties of the futures exchange and requires it to establish certain mechanisms and measures.
The conditions and procedures of establishing a futures company in China are covered by the Regulation. Subject to approval by China Banking Regulatory Commission, financial institutions could engage in financing business to the futures trading. It will also be possible for state-owned or state-controlled companies to enter into overseas futures trading, subject to rules that will be prepared by the competent authorities separately.
The new Regulation was issued by the State Council of the PRC on February 7 2007. Effective from April 15 2007, it will replace the old regulation of 1999.