BEIJING, Feb. 24 (Xinhua) -- Qualified pilot commercial banks and insurance institutions capable of investment management in China were permitted to participate in trading T-bond futures listed on China Financial Futures Exchange (CFFEX), reported Xinhua Finance, an economic information platform run by Xinhua News Agency.
The report citing CFFEX said on February 21 that their participation in T-bond futures market is helpful for them to manage interest rate risks and reinforce operation stability. On the other hand, the move can further enrich the investor structure of futures market and foster functioning of T-bond futures.
In China, commercial banks and insurers are the major participants of bond market trading. T-bond futures, an important financial derivative worldwide, were resumed trading on CFFEX in China in 2013 and include such key term products as 2-year, 5-year and 10-year ones currently.
Qiao Hongjun, president of Business Center for Financial Markets with Bank of Communications said commercial banks taking part in T-bond futures market was significantly meaningful for themselves and China's bond market and financial industry as well.
As China's financial market opening-up deepened and interest rate liberalization went ahead, foreign investors kept raising their investment in China's bond market, which was sure to trigger robust demand for hedging by employing interest rate derivatives, according to Qiao.
Statistics from China Futures Association, annual transaction of the three T-bond futures products topped 13 million lots last year, up nearly 20 percent over 2018 and became gradually a key risk management tool of financial institutions including securities brokers and fund firms.
CFFEX, established in September 2016, is an incorporated exchange specializing in providing trading and clearing services for financial futures, options and other derivatives. (Edited by Duan Jing, duanjing@xinhua.org)
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