China relaxes stock-index futures trading rules

Caixin reports that China relaxed rules on transaction size and trading costs for stock-index futures in a move to revive the market after harsh restrictions brought trading almost to a halt after the 2015 market meltdown. The China Financial Futures Exchange (CFFEX) said on its website late Thursday that it will reduce trading commissions, lower margin deposits for non-hedging accounts and double the daily cap for opening new positions beginning Friday. The easing of controls on stock-index futures signals that China’s stock market has returned to normal, said Li Daxiao, chief economist at Shenzhen-based Yingda Securities, on social media. Stock-index futures provide a tool for investors to hedge against risk while helping to rationalize market prices, he said. In its statement, the CFFEX said it would adjust trading rules “in a gradual and orderly” manner.