Chinese brokers to set up in Hong Kong

Six Chinese futures brokerages will soon get the green light to start derivatives broking operations in Hong Kong, a source close to the Hong Kong Exchanges and Clearing (HKEx) tells RiskNews .

The six brokers were given the green light by the China Securities Regulatory Commission (CSRC) earlier this year to trade outside the mainland. Currently, only 31 large industrial Chinese corporations have approval to trade in futures markets abroad for hedging purposes, but the latest move could result in more Chinese companies being allowed to hedge their risk in the international markets.Although the CSRC did not officially name the approved brokers, the source tells RiskNews that the six firms are: China International Futures (Cifco), Gelin Futures Brokerage, Guanghua Futures Brokerage, Jinrui Futures Brokerage, Nanhua Futures Trading and Zhejiang Yongan Futures Brokerage. They will be regulated by Hong Kong’s Securities and Futures Commission (SFC). One of the brokers, Cifco, expects to get the green light from the SFC soon, said its general manager Ma Wensheng.Meanwhile, Zhejiang Yongan has set up a joint venture with Hong Kong’s Sun Hung Kai Financial, and will hold 75% of the new company, called China Xin Yongan Futures Company. It is expected to submit its application to the SFC this month, said its vice-president Jiang Ningqiang.The company will trade futures, advise clients and conduct research on local and international commodities futures in global exchanges, such as the Nikkei 225 on the Singapore Stock Exchange, Dow Jones futures on the Chicago Board of Trade, metal futures on the London Mercantile Exchange and Hang Seng Index futures on the HKEx.