More mainland futures firms to open branches in HK
(Xinhua)Updated: 2007-01-20 09:43
China International Futures Co., Ltd. is another mainland futures firm approved by CSRC to do business in Hong Kong.
China International Futures' subsidiary in Hong Kong went into operation on Dec. 28 last year, becoming the first mainland futures firm to do business in Hong Kong.
Tian Yuan, chairman of China International Futures, said the branch operation was a milestone in China's futures industry history.
Mainland futures firms are legally required to have a clean business record and annual average futures deposits with the top 30 in the industry to do business in Hong Kong.
The firms are also required to have made a profit for three of the past five years, and have a minimum registered capital of 50 million yuan (6.4 million U.S. dollars). Good corporate governance standards and risk management practices are also requirements.
Under CEPA regulations, mainland subsidiaries in Hong Kong are prohibited from acting as agents for domestic companies that want to carry out futures trading overseas and they are banned from acting as agents for overseas investors to do futures business on the domestic market.
A source with the China International Futures said its Hong Kong subsidiary would mainly serve as a channel for domestic and overseas investors, especially overseas Chinese.
Insiders expect the revised regulations on futures trading, which are yet to be issued, would loosen controls on domestic futures firms that plan to do business overseas.
According to the China Futures Industry Association, China's futures turnover hit a record 21 trillion yuan last year, up 56.23percent year-on-year. China has 183 futures firms.
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