China formally approves stock index futures rules: Report

China's securities regulator has formally approved rules on contracts and services for planned stock index futures trading, clearing the way for setting up investor accounts, the Xinhua news agency reported on Saturday.                                           

The margin requirement will be set at 12% and the position limit at 100 contracts, Xinhua quoted a regulatory official as saying, in line with specifications outlined by the China Financial Futures Exchange last month that were more conservative than previous plans.                                           

Xinhua said the formal approval meant that all systems-related preparations had now been completed. It quoted the regulatory official as saying that a notice would be issued over the next day or two and qualified investors would be able to start opening accounts.

The report added, however, that the opening of accounts would not necessarily mean that the start of futures trading was imminent. 

The China Securities Regulatory Commission said in January when it announced its approval of stock index futures that it would take about three months to prepare for the actual start of trading.

China is launching stock index futures, along with margin trading, short selling of stocks and other reforms, to deepen its financial markets with hedging tools and new products while improving liquidity, as it aims to build Shanghai into a global financial centre over the next decade.