China Tightens Index Futures Trading as Stocks Dip Before Parade
- Opening more than 10 contracts will be defined as ``abnormal''
- Fees raised for settling contracts opened on same day
An investor observes stock market at a stock exchange hall on September 2, 2015 in Hangzhou, Zhejiang Province of China.
China moved to limit trading of stock-index futures by lowering the bar for “abnormal trading” and increasing margin requirements and settlement fees, as the country’s stock market failed to rally on the last trading day before a major military parade.
Opening more than 10 contracts on a single index-futures product on the CSI 300, SSE 50 and CSI 500 indexes will be defined as “abnormal trading” starting Sept. 7, the China Financial Futures Exchange said on its official Weibo account after the market closed Wednesday. The amended restriction won’t apply to futures used for hedging purposes, it added, without saying how it will determine which trades are for hedging. The standard already had been lowered to 100 contracts from 600 on Monday.