(Adds investor quote, more details)
By Samuel Shen and Nicholas Heath
SHANGHAI/BEIJING Feb 16 China's securities
regulator said late on Thursday it will relax certain rules on
stock index futures trading as the government starts to
gradually unwind restrictions imposed during the 2015 stock
Starting on Friday, rules restricting "excessive trading" in
stock index futures will be eased, doubling the previous daily
cap of 10 contracts to 20. In addition, margin requirements and
trading fees for the derivative trading will also be lowered.
The announcement was immediately seen by some hedge fund
managers as a positive harbinger for China's thinly-traded index
futures market, but optimism was restrained.
"Spring is coming. This is encouraging," said Fang Ming, a
senior executive at Shanghai-based hedge fund house MingShi
"But the moves are more symbolic in nature, and will give
limited support to market liquidity," he said, adding the new
daily cap of 20 contracts is still too restrictive.
China imposed a series of restrictions on stock index
trading during the stock market crash in the summer of 2015,
blaming the derivatives for worsening a crisis that sent
shockwaves across global financial markets.
As a result, trading in China's stock index futures tumbled,
nearly killing a market that provides much-needed hedging tools
for investors in a volatile stock market.
Thursday's announcement shows the government is getting more
confident of the stock market, which has gained over
20 percent from a bottom hit a year ago, as the economy shows
signs of recovery.
Under the leadership of the China Securities Regulatory
Commission (CSRC), the China Financial Futures Exchange has
decided to adjust trading rules "in a gradual and orderly"
manner, to enable market forces play a bigger role, according to
an exchange statement, which was also posted by CSRC.
Margin requirements for what is seen as speculative trading
in CSI 300 Index Futures and SSE 50 Index Futures will be
slashed to 20 percent, from 40 percent, while the requirements
for trading in the CSI500 Index Futures will be reduced to 30
percent from 40 percent.
(Reporting by Samuel Shen and John Ruwitch; Editing by Clarence