January 10, 2012 / 2:22 AM / 8 years ago

China regulator says mulling bond, silver futures

SHANGHAI, Jan 10 (Reuters) - China stock market regulator said it would consider launching government bond futures and other commodities-related futures such as crude oil and silver in a bid to develop the country’s nascent derivatives market.

Guo Shuqing, the newly appointed chairman of the China Securities Regulatory Commission (CSRC), said the commission would accelerate plans to roll out more equities, bonds and funds related investment products as part of wider efforts to open up the country’s financial sector.

China’s previous foray in government bond futures in late 1992 was forced to shut down less than two years later due to a combination of rampant speculation, price manipulation and poor regulation.

Guo also said China needs to substantially raise the scale of direct financing to diversify systemic risk in its banking sector, adding that the CSRC would encourage more long-term institutional investors, such as pension and housing funds, to increase their investments in the stock market.

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In remarks published online following the regulator’s annual work conference, the CSRC also pledged to further open the yuan-denominated A share market to foreigners by raising the investment quota for Qualified Foreign Institutional Investors, as well as expanding its recently launched Renminbi QFII program.

China last year introduced credit-default swaps and stock index futures in a bid to give domestic investors more hedging tools. (Reporting by Fayen Wong and Chen Yixin; Editing by Ken Wills)

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