Chinese brokers to resume international futures trades

China’s securities regulator plans to allow domestic brokers to access international futures markets for the first time in 17 years, providing mainland companies with more options to hedge risk when operating abroad, the Wall Street Journal reported. The China Securities Regulatory Commission selected three domestic brokerage firms to participate in the trial program, the details of which could be issued later this year. Big Chinese companies have used international brokerage outfits to trade futures since Chinese regulators banned domestic futures companies from trading overseas in 1994. But demand for hedging has risen in recent years as more Chinese companies venture abroad, particularly in the commodities and energy sectors. “The trial program is part of the government’s efforts to further open up its financial sector and help Chinese enterprises hedge risks from fluctuations in global commodity markets and gain more pricing power,” said Jiang Xin, chairman of China International Futures.