Money

FACTBOX-China's first stock index futures contracts

(Agencies)
Updated: 2010-04-16 09:56

SHANGHAI - The Shanghai-based China Financial Futures Exchange will launch the country's first stock index futures on April 16.

The Shanghai Stock Exchange is the world's fifth-largest bourse, with a market capitalisation of $2.6 trillion and average daily turnover of about 100 billion yuan ($14.65 billion).

But China has no major financial derivative products, leaving investors without hedging tools and limiting the country's pricing power in the international arena.

China aimed to breathe new life into its stock market with the establishment of the CFFE in 2006, although the launch of new products has been delayed by the global financial crisis.

Following are details on the pioneering index futures contracts, as published on the exchange's website .

Contract details

Underlying index: The CSI300 Index, which is based on the 300 largest firms by daily turnover and market capitalisation on the Shanghai and Shenzhen stock exchanges.

Unit: Index point

Contract size: 300 yuan times the level of the CSI300. Based on the index's Thursday close of 3,394.573 points, a single contract would be worth 1,018,372 yuan .

Minimum margin: 12 percent of the contract's value, meaning investors would have to put up more than 122,000 yuan to trade one contract at current index levels.

Trading unit: one lot, or one contract

Minimum price change: 0.2 index points

Daily limits: 10 percent up or down from previous settlement price.

Contract months: Delivery month; next month; and the two subsequent end-of-quarter months

Trading time: Monday to Friday except public holidays.

9:15 am to 11:30 am (0115 to 0330 GMT)

1:00 pm to 3:15 pm (0500 to 0715 GMT)

Last trading/settlement day: Third Friday of the delivery month

Delivery method: Cash delivery

Trading code: IF

Trading requirements:

Individuals:

-- At least 500,000 yuan on deposit for margin requirements to open an account;

-- Pass relevant examinations on futures trading;

-- Participate in mock trading in index futures for at least 10 days and conduct at least 20 mock transactions;

-- No record of serious violations of securities rules.

Institutional investors:

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-- At least 1 million yuan in net assets;

-- At least 500,000 yuan on deposit for margin requirements to open an institutional account;

-- Employ professional futures trading personnel who have passed relevant examinations;

-- Participate in mock trading in index futures for at least 10 days and conduct at least 20 mock transactions. Alternatively, have concluded at least 10 deals in commodity futures transactions over the past three years;

-- No record of serious violations of securities rules.