Published On: Wed, Feb 16th, 2011

China Futures Firms to Provide Investment Consulting Services

China’s securities regulator said on Friday February 11 that it would allow qualified futures firms to run consulting businesses on futures investment for profits.

The businesses include consultations on risk management and futures transactions, as well as futures research and analysis, the China Securities Regulatory Commission said in a draft for collecting feedback posted on its website.

The new policy aims to meet the increasing demand from enterprises and clients for the use of futures markets for risk management and hedging amid large fluctuations of commodity prices in recent years, an unnamed official with the regulator said.

As China made available its stock index futures, investors found the need for professional consultation service from futures firms, the source said. The charges, which are pending approval from the National Development and Reform Commission, will not be high, the source added.

The statement prohibited qualified futures firms from providing clients with false information, market rumors and insider information for profits. Manipulating futures trading prices and insider trading through investment consultation are also prohibited, the statement said.

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