By Lewis Jackson
BEIJING (Reuters) -The Shanghai Futures Exchange (ShFE) released draft proposals on Tuesday to further open up domestic futures to overseas investors and brokers as part of an effort to help internationalise the renminbi.
China is the world’s largest consumer of industrial metals by far, but much of the trade is priced by overseas benchmarks. ShFE has long been working on plans to build its global presence and challenge the dominance of the rival London Metal Exchange.
The 34 different proposals, which stretch from options trading and hedging to tin futures, aim to “fully introduce overseas participants” and help internationalise the renminbi, the exchange said.
“This announcement is basically a constitutional change for the entire ShFE opening up,” said Tiger Shi, CEO of broker BANDS Financial. “Access for foreign investors to all the ShFE products is on a fast track from now on.”
The changes under consideration include allowing foreign brokers and other traders directly onto the exchange instead of through an on-shore intermediary as is the case today. Participants would also be allowed to post margins in foreign currencies like the U.S. dollar.
Draft rule changes covering futures for 18 products including alumina, nickel and copper cathodes, are available for public comment until June 4.
(Reporting by Lewis Jackson; editing by Mark Heinrich)
