Interview: China to improve futures, derivatives market oversight: official

BEIJING, April 21 (Xinhua) -- A senior official of China's securities authority has called for further improving the development and supervision of the country's futures and derivatives market following the adoption of a new relevant law.

The law on futures and derivatives, which will take effect on Aug. 1, 2022, was approved Wednesday at a session of the Standing Committee of the National People's Congress, China's top legislature.

"The law will focus on scrutinizing the futures market while also regulating the derivatives market," Yi Huiman, chairman of the China Securities Regulatory Commission, told Xinhua in an interview.

With 155 articles in 13 chapters, the new law focuses on issues including futures trading, settlement and delivery, protection of futures traders, as well as the supervision of the futures market.

It incorporates mature and reliable mechanisms that have been tested through practice, follows market trends, and provides sufficient policy space for market innovation, Yi said.

In terms of the law's role in boosting the real economy, Yi said it encourages enterprises to use the futures market to engage in risk management activities, promotes the development of farm produce-related futures and derivatives market, and expands the business scope of futures companies.

"Forestalling and defusing market risks will be a top priority of the law," Yi said.

Risk control systems will be improved, and the mechanisms for identifying, preventing and dealing with risks in the futures market will be strengthened, according to the law. Punishment for violations will also be tightened.

Moreover, the law clarifies regulatory requirements for overseas futures trading venues and overseas futures operating institutions to provide services to the Chinese mainland, and regulates cross-border trading behaviors, the chairman said.

Following the adoption and implementation of the law, the commission will further enhance the effectiveness of supervision and strengthen personnel training to promote sound and stable development of the market, according to Yi.