The State Council has given the China Securities Regulatory Commission (CSRC) approval "in principle" to introduce index futures, Bloomberg reported. The move could mean the introduction of a futures contract based on the CSI 300 Index of the Shanghai and Shenzhen markets as soon as the annual Communist Party Congress in March. Futures would offer Chinese investors the ability to short stocks and hedge risks; in the current market, investment gains arise only from stock price increases. Additional regulations will require investors to purchase 10% of a contract’s value as collateral in order to trade futures. The limited number of investment options available to Chinese savers has led to a series of asset bubbles, even as CSRC officials have stated that the infrastructure for a futures market is in place.
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