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Several days before December 11th, 2006 when China will fully open its banking sector to foreign lenders in line with its commitment to the World Trade Organization, the China Banking Regulatory Commission announced Guidelines on Financial Innovation of Commercial Banks to encourage and regulate financial innovation by commercial banks. After over 6-month preparation, on September 8th, 2006, the China Financial Futures Exchange was announced set up. It is obvious, that, China has witnessed great changes in financial landscape in 2006. China has been ready and eager for more financial innovations.
The emergence of the Stock Index Future (SIF) would undoubtedly be the most exciting innovation in 2007 in China. It provides an effective tool to hedge financial risks in the market as well as a new investment option in China. In a history as short as 30 years, Financial Derivatives become the most indispensable composition of the capital market in the world. Especially, as a sound risk management tool in the capital market, Stock Index Futures is developing at an unexampled speed. According to the latest report of Futures Industry Association (FIA), by the end of 2006 there were over 170 different stock index futures contracts and the traded volume reached as many as USD$ 4.5 billion, which was over 6 times of that in 2000. At present, the volume of SIF occupies more than 41% in the total volume of all financial derivatives.
With the introduction of Go Short, SIF completes the capital market of China, which enables the investors to protect their investments when the market is going down or even make a fortune out of the downturn. For China, the rapidly developing market, however, it is only a start. There will be more innovative financial products fitting into China’s practice, further regulation reforms enabling increasing cooperation and investments and more improvements on the financial system completing the multilayer capital market.
This conference is a rare opportunity together with over 200 industry peers concerning about China’s financial derivatives market from every corner of the world including Investment Banks, Commercial & Policy Banks, Institutional Investors, Trusts, Futures, Fund managers (Hedge), Private Equity, Brokerage Firms, Credit Ratings, Exchanges, Asset Management, Industry Entrepreneurs, Investment Advisors, Technology Providers and Law/Accounting/Tax Consultancies, to evaluate the development of capital market in China, to discuss the interaction between financial innovations and capital market, to predict the future landscape of China’s derivatives products and policy innovations, to exchange opinions on the developments of derivatives in China and to explore the cooperation possibility with local partners.
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