Top Biz News

Huatai buys 49% of Great Wall Futures

By Jin Rong (China Daily)
Updated: 2006-08-01 10:12

Leading brokerage Huatai Securities has bought 49 per cent of Great Wall Futures, the latest sign of securities firms' growing interest in futures houses as the trading of financial futures approaches.

Both sides declined to reveal the financial terms involved in the deal, which was approved by the securities regulator on July 21.

Securities brokerages, under existing regulations, can only buy less than 50 per cent of futures firms.

The latest acquisition "could provide Huatai with a much-coveted access to the upcoming financial futures trade," an official from Huatai Securities told China Daily yesterday.

"It is a shortcut to lucrative stock index futures and other financial derivatives trading which are increasingly coming closer," said the official, declining to be identified.

China decided earlier this year to set up a financial derivatives exchange in Shanghai, where only stock index futures and other financial derivates will be traded. The exchange is yet to be officially inaugurated, but is widely expected to make its debut later this year.

Under the revised draft of the futures regulation, only futures companies will be allowed to trade stock index futures and other financial derivatives, while securities firms will be banned from directly conducting derivatives trading.

However, an Introducing Broker (IB) arrangement, under which securities firms could indirectly involve themselves in financial futures trading by introducing their clients' business deals to futures houses in exchange for a commission, will be introduced.