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The 5th Shanghai Derivatives Market Forum themed “Economic Globalization and Role of Derivatives Market”, organized by the Shanghai Futures Exchange (SHFE), was held in Shanghai on May 28. Vice Chairman Fan Fuchun of the China Securities Regulatory Commission (CSRC) addressed that China’s futures market is going through great changes now, standing at a new starting point in history. Thanks to the accelerated economic globalization, the futures market has closer ties with the national economy and spot enterprises. Therefore, guided by the Scientific Outlook on Development, various measures should be taken to promote China’s futures market to develop in a healthy way and better serve the whole national economy.
According to Fan, in recent years, under the wise leadership of the CPC Central Committee and the State Council, the CSRC, based on China’s actual conditions and general rules of the market development, has referred to experiences of mature markets and made continuous efforts to improve the infrastructure of the futures market, thus promoting its steady development. Firstly, the futures market is expanding continuously. Its trading volume in 2007 accounts for 166% of in GDP, with the trading products covering 4 fields of agricultural products, metals, energy and chemicals. All preparations for index futures have been in steady progress. Secondly, the law and regulation system has been improved gradually. A relatively complete law and regulation system has been established, including the "Regulation on Administration of Futures Trading", department rules and regulatory documents. Meanwhile, risk control of market participants has been intensified by establishing and perfecting various basic systems, including futures margin depositary, supervision over futures companies’ net capital, real-name system of opening accounts for futures trading. Thirdly, the market is in smooth operation on the whole. While the futures prices saw great fluctuation both at home and abroad and risk events happened successively on the international market, the domestic futures market ran steadily, without serious market risks. Fourthly, the structure adjustment of intermediaries has seen achievements. Guided by a series of systems, since 2007, 107 companies have completed equities transfer and capital increase, and 53 securities companies and other financial institutions have controlled the stocks of futures companies. Also business licenses of 11 futures companies have been revoked due to their bad assets quality, long-term business suspension and hopeless implementation of rectification. Fifthly, the futures market’s roles are gradually given to full play. The futures industry better serves the national economy development, and the futures prices could show the scarcity degree and the “supply and demand” relationship of relevant commodities, thus optimizing resources allocation and guiding social production and consumption, especially in the fields of non-ferrous metals and agricultural commodities.
According to Fan, with turbulence of global financial market and drastic rise in prices of the raw materials, energy and agricultural products, the domestic and international futures markets are both facing complexity and variability. On the one hand, the outstanding importance of the futures market demands for giving full play to the functions of future price discovery and risk management. The urgent objective demands thus become the motive of the sustainable development of futures market. On the other hand, the more complicated factors influencing the futures market and strengthened connection of the global market raise more requirements for participants’ capability of risk control. In addition, with increasingly complicated financial technology and strengthened connection of global market, supervision over futures market and risk prevention becomes more difficult and requires futures regulatory authorities of all countries and regions to strengthen cooperation in more effective supervision over products innovation, intermediary institutions and market trading.
Fan stressed that the CSRC would promote sound development of the futures market with the guideline of the Scientific Outlook on Development. Firstly, to further consolidate the market foundation and reinforce market supervision. We will promote the construction of the operation monitoring and supervision system of the futures market and continuously improve the market regulatory mechanism. Thus, we will supervise the futures market operation in a more comprehensive, accurate and timely way as well as detect, deter and investigate the market’s abnormal fluctuation and suspicious trading in time. In addition, we should keep high alert to the manipulations in the process of price forming and eliminate them by forceful measures, to crack down on the lawbreaking including cross-market manipulation. Secondly, to devotedly cultivate professional institutional investors. The CSRC will actively promote the market construction with institutional investors as the main players of the futures market, set up a sound system arrangement with futures trading participation by all kinds of institutional investors. According to the supervision concept of “supporting excellent ones and restricting bad ones”, we will study and promote the sustainable and professional development of intermediaries. Thirdly, to accelerate market innovation and further develop block commodities futures. Based on giving full play to the current products’ function of price discovery and hedging, we will continuously list the influential new products. Meanwhile, we will further deepen the reform and innovation of futures exchanges, do a better job of market cultivation and expansion, investor education, protection of investors' rights and interests and good-faith construction, to improve the exchanges’ service function and market efficiency as well as attract more investment in futures market. Moreover, the CSRC will create conditions to make the three futures exchanges in Shanghai, Dalian and Zhengzhou become price discovery and pricing centers with international influence, thus facilitating the prices in Shanghai, Dalian and Zhengzhou with more influence in China and the whole world.
CSRC’s former Chairmen Zhou Zhengqing, Liu Hongru and Zhou Daojiong made speeches at the forum.
SHFE’s General Manager Yang Maijun presided over the opening ceremony of the forum. During this one-day-and-a-half meeting, there would be the General Assembly, the International Futures Exchanges Conference, International Gold Symposium, International Symposium on Energy, International Symposium on Natural Rubber and International Symposium on Basic Metals. Senior personnel from the State government departments, all relevant industry associations, domestic and international well-known futures exchanges, financial institutions and enterprises and experts from the derivatives industry made speeches on the development status quo and trend of global economy and derivatives market, opportunities and challenges, concepts and strategies, economic globalization and development of China’s future market, the development and innovation of China’s future market, and development of basic metals, precious metals, energy and rubber futures.
Tu Guangshao, a member of the Standing Committee of the CPC Shanghai Committee and Vice Mayor of Shanghai, attended the forum and extended congratulations at the forum on behalf of the Shanghai Municipal Government. Attending the forum were CSRC Assistant to Chairman Jiang Yang, Executive Vice Chairman Luo Bingsheng of the China Iron and Steel Association, Deputy Commissioner Xu Xianchun of the National Bureau of Statistics of China, Governor Geng Liang of the Shanghai Stock Exchange, Chairman Liu Zhichao of China Futures Association and Governor Wang Lihua of the Shanghai Futures Exchange, and nearly 400 representatives of relevant institutions and media from domestic and foreign derivatives markets and industries of metals, energy, rubber and finance.
