April 5, 2012 / 1:36 AM / 6 years ago

China drafts equities futures rules for insurers -report

SHANGHAI, April 5 (Reuters) - China has begun preparing draft regulations that will allow insurers to trade domestic stock index futures, the China Securities Journal said on Thursday, as part of a broader plan to gradually open up the domestic securities market.

Participation by Chinese insurers, however, would be limited to hedging, and they would not be permitted to trade for speculative reasons, the newspaper said, citing unidentified industry sources.

Some of the risk control measures include ensuring investments in stock index futures by insurers do not exceed their positions in the main stock indexes, and limiting the frequency of transactions, the report said.

It added that regulators had asked several insurance companies to prepare for a pilot trading programme, although it was not clear when trials would begin.

China’s CSI 300 equity index futures, launched in April 2010, track the main Shanghai and Shenzhen bourses.

In May, the securities watchdog published draft rules that will allow approved foreign investors to trade stock index futures, currently dominated by retail investors. (Reporting by Fayen Wong and Chen Yixin; Editing by Chris Lewis)

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