China Securities Regulatory Commission (CSRC) recently announced types of financial derivatives for qualified foreign investors to transact. Three new additions include commodity futures, commodity options, and stock index options. It is worth noting that the last one can only be transacted for hedging. The announcement takes effect on November 1, 2021.

Expanding areas for qualified foreign investors to invest in represents an important milestone in China’s commitment to reforming onshore market and further opening up domestic securities and futures market. Foreign investors will be provided with a greater variety of hedging products and allocation tools. This will attract more foreign investment, and increase the influence of domestic capital market on global investors. Since their trading on the market, the new varieties have delivered stable performance, and fulfilled their distinctive functions, making them suitable for open trading.

In the future, CSRC will conduct ongoing assessments with the People’s Bank of China and State Administration of Foreign Exchange to determine the right time for the launch of more products to open China’s capital market wider to the rest of the world. 

Source:People's Daily Online