Credit Suisse, Morgan Stanley to Trade China Stock Index Futures

Credit Suisse Group AG (CS) and Morgan Stanley (MS) are among five foreign investors approved to trade stock index futures on the China Financial Futures Exchange.

Credit Suisse is one of the Qualified Foreign Institutional Investors, also known as QFIIs, that obtained permits to trade the instruments, Josephine Lee, a Hong Kong-based spokeswoman at the bank, said by phone today. Morgan Stanley was also selected, a person with direct knowledge of the matter said, asking not to be identified because the information isn’t public.

China is seeking to attract investment to its capital markets by broadening the range of instruments available to foreign institutions. Policy makers can also increase the limit on the amount of QFII investment 10-fold, Guo Shuqing, chairman of the China Securities Regulatory Commission, said Jan. 14.

China “recently” selected five firms from the QFII program as the first foreign funds to trade stock index futures, an exchange official told Bloomberg News last week.

UBS AG and BNP Paribas SA (BNP) are also among the five firms, the Wall Street Journal reported on Friday, citing people it didn’t identify. UBS China spokeswoman Joanna Sin declined to comment. Amanda Liu, a Shanghai-based BNP Paribas spokeswoman, had no immediate comment when contacted by phone today.

Morgan Stanley China spokeswoman Xu Li declined to comment.

The CSRC increased the total allotment under the QFII program to $80 billion in April. More than 200 institutions have obtained QFII status as of December, according to the watchdog. The investors have a total of about $37.4 billion approved for investment in China’s capital markets, according to the country’s foreign exchange regulator.

To contact Bloomberg News staff for this story: Aipeng Soo in Beijing at asoo4@bloomberg.net; Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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