Index futures trading, margin trading and securities lending in China

Paget Dare Bryan, Tiecheng Yang and Patrick Phua, Clifford Chance LLP

Following the Announcement, CSRC on 12 January 2010 provided its formal approval of stock index futures trading on CFFEX on the basis that the timing of such approval would be determined by CFFEX based on prevailing market conditions and the progress of the relevant preparation work. Such preparation work is expected to take about three months and kicked off on 15 January 2010 when CSRC issued a draft consultation report addressing the suitability of investors intending to invest in stock index futures. On 8 February 2010, the Provisions on Establishing a Regime for Suitability of Investors of Stock Index Futures (Trial) (the ‘Trial Provisions’) promulgated by CSRC came into effect. In order to carry out the Trial Provisions, the CFFEX issued the Rules on Implementing the Regime for Suitability of Investors of Stock Index Futures (Trial) (the ‘Implementing Rules’) and the Guidance on Implementing the Regime for Suitability of Investors of Stock Index Futures (Trial) (the ‘Guidance’) which also came into effect on 8 February 2010.