Chinese regulator extends derivatives transition period
The China Banking Regulatory Commission (CBRC) has extended the transition period for its new derivatives licensing regime, giving banks an extra three months to get licences in place that will allow them to trade derivatives onshore.
“Some departments received a lot of applications,” said Li Fuan, CBRC deputy director-general of the supervisory rules and regulatory policy department in Beijing. “For officers to review these and make proper evaluations will take time.”
A slew of banks have applied to their local CBRC branches for licences since the new regulations came into force. The CBRC needs to approve the application at the local level and in its Beijing headquarters.
The new regulations allow licensed local and foreign banks to trade derivatives on their own accounts for profit – previously they were only allowed to use them to hedge. Licensed foreign banks will also be able to do business with domestic corporate clients onshore. Previously, foreign banks were permitted to trade only with Chinese financial institutions.
Banks that have so far been given the go-ahead include ABN Amro, Bank of Tokyo-Mitsubishi, Citigroup, Credit Suisse First Boston, Mizuho Bank and Standard Chartered. Others such as Deutsche Bank, HSBC and JP Morgan Chase are still waiting.
Feng Gao, Deutsche Bank’s co-head of global markets for China, says he is hopeful the bank will be given the green light “soon”. And an HSBC spokesperson in Hong Kong said, “The CBRC Shanghai Branch has approved our application and we’re awaiting approval from the CBRC head office in Beijing.”
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Industry frowns on FCA’s single-sided trade reporting efforts
Buy side warns UK attempt to ease Mifir burden may miss target; dealers aren’t happy either
One vision, two paths: UK reporting revamp diverges from EU
FCA and Esma could learn from each other on how to cut industry compliance costs
Market doesn’t share FSB concerns over basis trade
Industry warns tougher haircut regulation could restrict market capacity as debt issuance rises
FCMs warn of regulatory gaps in crypto clearing
CFTC request for comment uncovers concerns over customer protection and unchecked advertising
UK clearing houses face tougher capital regime than EU peers
Ice resists BoE plan to move second skin in the game higher up capital stack, but members approve
ECB seeks capital clarity on Spire repacks
Dealers split between counterparty credit risk and market risk frameworks for repack RWAs
FSB chief defends global non-bank regulation drive
Schindler slams ‘misconception’ that regulators intend to impose standardised bank-like rules
Fed fractures post-SVB consensus on emergency liquidity
New supervisory principles support FHLB funding over discount window preparedness