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Futures Companies Active in Setting up Subsidiary

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2014-08-18 11:18:20 来源:大连商品交易所网站 
It is learnt that currently China Futures Association (CFA) has completed the draft for the amended “Guidelines for the Pilot Work in Futures Companies Setting up the Subsidiary to Mainly Provide Risk Management Services” (the “Guidelines” for short), which is expected to be issued to the member units soon. According to a number of insiders, in more than a year since the subsidiary business was piloted, the institutions have strived for the qualification for the business. The revision to the Guidelines will play a significant role in promoting the innovation and development of the industry, streamlining the business processes and other aspects, and the institutions will be more active in the business. However, with quite different backgrounds of shareholders among the futures institutions, some subsidiaries are likely to face some shortcomings in carrying out the business and the subsidiaries should implement diversified competition according to their own advantages. It is learnt that in addition to clearly positioning the "risk management subsidiary" and extending the basis trading, the warehouse receipt service and co-hedging and pricing services, the market making business is added in the revised Guidelines mainly in a bid to make preparation for the introduction of options, OTC derivatives trading and other new businesses in the future; meanwhile, the draft provides the definitions of the businesses in the supplementary articles, requiring that the companies should categorize the transactions according to the business nature to carry out the category management. An official of a Beijing-based futures company said that the revision to the Guidelines will make the business simpler and the company will be more active in the business. “At the pilot stage of the subsidiary business, the risks management and control were strict, but the revision cancels the process of the expert review committee, which will effectively improve the efficiency of approval. Overall, the revision to the Guideline will benefit the institutions.” Another insider said that the filing system implemented in the subsidiary business will expand the profit channels in the true sense for the institutions especially the companies who have not achieved the qualification for the asset management business. But considering the significant difference in the backgrounds of shareholders of the futures companies, some subsidiaries should make choices in competition when offering the businesses. For example, the futures companies with the background of spot goods may provide the businesses in basis trading and pricing service but face some shortcomings in the newly added market making business, which requires that the subsidiaries should make choices in business competition according to their own advantages. The insider also said that at the pilot stage the subsidiary business poses high requirements for risks. The revised Guidelines still requires that “The futures company shall not be lower than Degree B Class B in the latest categorized supervision rating” and “In the filing period, the futures company shall not have less than RMB 300 million in net capital and shall meet the requirements for the risk supervision indicators in the last six months”, which means that the institutions with low capability of risk control are not suitable for the business; the companies should have strong capital strength and capability of compliance and risk control to undertake and respond to potential risks and possible problems. It is also learnt that in the process of revising the Guidelines, some insiders suggested cancelling the requirement for filing the business, believing that the requirement is likely to make the risk management subsidiaries less active in offering the business. But the CFA holds that it is the foundation for the pilot of the subsidiary to make clear of the purposes and directions of the business. To ensure that the pilot work can advance in the set directions and avoid the risks caused by the blindness in developing the business and the adverse impact on the overall pilot work and the innovation-based development of the industry, it is necessary to learn about the companies’ progress in the business. The filing is only a procedure after the company’s independent decision-making, and it will not affect the business so long as the business is in line with the direction of the pilot.

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