Gold exchange considers derivatives trading
Updated: 2007-06-07 16:09 Shanghai Gold Exchange, which already offers spot
trading, wants to trade gold and silver futures as it aims to offer investors
the option of derivatives trading, its chairman said yesterday.
bourse, China's sole gold exchange, has already gained approval from the
People's Bank of China, the central bank, to trade gold and silver futures, Shen
Xiangrong, chairman of the exchange, said at its members' meeting in the
Shen said once the central bank approves the rules governing
futures trading and risk management of the two metals, the gold exchange will
officially submit an application to the China Securities Regulatory Commission(CSRC),
which is the watchdog for securities and futures trading.
introduction of futures products on the gold exchange is a must for the bourse
as it moves to offer investors the option of derivatives trading," said
He said the move to futures trading will be a milestone, as central
bank Governor Zhou Xiaochuan has pointed out.
The bourse has already completed testing the trading
system for futures and has trained staff on derivatives trading as it prepares
for the move, and has already discussed the issue with the CSRC.
trading is under the supervision of the central bank while futures trading comes
under CSRC's purview.
The pending rules on futures trading supervision
offer a good opportunity for the gold exchange to collaborate with other futures
bourses and institutions that gain approval from the futures
The gold exchange also didn't rule out the possibility of
teaming up with the futures exchange to trade gold futures, Shen said. Market
speculation has been swirling that the Shanghai Futures Exchange is also
interested to introduce gold futures trading.
The gold bourse has also
done research on gold bonds, gold exchange-traded fund, precious metals index
futures and gold buy-back as possible product offerings, said Wang Zhe,
president of the gold exchange.
The exchange is already conducting gold
spot and forward trading. The bourse also plans to add five overseas banking
members for a trading list and has been in talks with HSBC and Scotiabank and
UBS on membership.
Wang also said the bourse will team up with more
commercial banks to trade gold for retail investors to add luster to the metal's
The Industrial and Commercial Bank of China, the
country's biggest lender, has already started gold trading for individual
investors on the gold exchange.
(For more biz stories, please visit Industry Updates)