On December 7, Chen Huaping, vice chairman of the China Securities Regulatory Commission, pointed out at the 19th China (Shenzhen) International Futures Conference that the China Securities Regulatory Commission will continue to expand cross-border cooperation. Support domestic and foreign exchanges to carry out settlement price authorization, cross-border commodity ETFs and other businesses, and allow overseas exchanges to launch more financial products linked to domestic futures prices. What were the key takeaways from the presentation? Jingtai interprets it for you.

Interpretation 1: The futures market has made remarkable achievements in development, and the effect of serving the real economy is outstanding

Chen Huaping said that through the joint efforts of all parties, the reform, development and stability of China's futures market have achieved remarkable results, and promoted the smooth operation and high-quality development of the market. At present, China's futures market has built a variety system covering a wide range of fields, including agricultural products, metals, energy, chemicals, building materials, shipping and finance and other key areas of the national economy, and listed 143 futures and options varieties. These products not only enrich investors' choices, but also make the option coverage ratio of mature commodity futures exceed 80%, promoting the formation of a diversified and interconnected product ecosystem.

In terms of total trading volume, in the first 11 months of this year, the cumulative turnover of the futures market reached 561.99 trillion yuan, a year-on-year increase of 7.98%. As of the end of November, the number of effective customers in the market reached 2.4898 million, and the total amount of funds was 1.73 trillion yuan, an increase of 12.86% and 14.97% respectively from the beginning of the year. It is worth noting that in terms of position structure, the position of corporate customers accounts for 64.93%, while the average daily equity of special legal persons accounts for 50%, indicating that industrial and institutional customers have become an important force affecting the quality and efficiency of the futures market.

In terms of price influence, the prices of most futures varieties in China have become the basic standards for domestic trade pricing, especially some open varieties such as crude oil, rubber, PTA and iron ore, which have important price influence in the Asia-Pacific region and are widely used in cross-border trade pricing. For example, the cross-border trade volume linked to the price of "Shanghai Rubber" futures accounts for about 40% of China's natural rubber imports.

The effect of serving the real economy is also very significant. Enterprises generally refer to futures prices to plan production and business activities, and use futures and options tools for hedging to reduce the risk of market fluctuations. In non-ferrous metals, oils and oilseeds, energy and chemical industries, the futures market has become an indispensable part of ensuring the smooth operation of enterprises and the stable operation of the industrial chain. The "insurance + futures" model provides substantial protection for the majority of farmers and farmland.

Finally, in terms of the construction of risk prevention and control system, China's futures market has established a risk management system that not only follows international practices but also reflects Chinese characteristics. Since the clean-up and rectification at the end of the last century, the system has ensured the smooth operation of the market for more than 20 consecutive years, successfully resisted the impact of multiple domestic and foreign economic crises and cyclical market fluctuations, and proved its strong resilience and self-healing ability. These valuable lessons have also been adopted by the International Organization of Securities Commissions (IOSCO) in the newly revised Principles for the Regulation of the Commodity Derivatives Market.

Interpretation 2: Help the construction of a unified national market

China has a super-large-scale market, which is an important advantage for national development and a solid support for coping with complex changes. In order to give full play to this advantage, it is particularly important to further build a unified national market. This will not only help deepen the division of labor and cooperation on a larger scale, but also give full play to the decisive role of the market in the allocation of resources. The Third Plenary Session of the 20th Central Committee of the Communist Party of China has made clear arrangements for this, and the high-quality development of the futures market has provided strong support for the construction of a unified national market at multiple levels such as price, circulation and standards.

First, the construction of the price system

Through its price discovery function, the futures market is able to integrate and process the scattered private information held by various participants into an open, transparent and continuous futures price. The scientific and reasonable premium setting takes into account the characteristics of different qualities and regions, so as to build a centralized, efficient and comprehensive price system at the national level. This price mechanism not only enhances the transparency of the market, but also provides a platform for all parties to compete on a level playing field.

Second, the construction of the circulation system

Futures exchanges have established a nationwide delivery network. By optimizing the layout of the futures delivery warehouse and the management rules of standard warehouse receipts, the functions of the futures delivery warehouse and standard warehouse receipts can be better played, the warehousing and logistics costs of enterprises can be reduced, and the circulation efficiency of bulk commodities can be improved nationwide. This move has a positive significance for smoothing the domestic circulation.

Third, the construction of standard system

Because of its authority and unity, futures quality standards have a wide impact on market participants and have become an indispensable part of China's standard system. With the growing demand for industrial transformation and upgrading, continuous optimization and improvement of futures standards can not only strengthen their leading role, but also motivate enterprises to improve production technology, improve product quality, and promote industrial upgrading and standard upgrading.

Interpretation 3: Development of "Five Financial Articles"

Chen Huaping pointed out that doing a good job in the "five major articles" of science and technology finance, green finance, inclusive finance, pension finance and digital finance is the key focus of the high-quality development of the real economy of financial services, and it is also an important part of deepening the structural reform of the financial supply side. The high-quality development of the futures market will open up new prospects in these areas and promote the financial system to better serve the national economic strategy.

1. Helping science and technology finance

In terms of science and technology finance, futures exchanges are gradually expanding their variety layout in the fields of new energy and new materials, providing tools for science and technology enterprises to lock in the cost of raw materials and effectively manage inventory. Futures operating institutions can tailor OTC derivatives and provide personalized risk management services according to the specific needs of technology-based enterprises, so as to help enterprises move forward steadily in the fierce market competition.

2. Promote green finance

For green finance, the futures market leads entities to achieve low-carbon transformation according to green standards by enriching green futures varieties and improving the delivery system. The timely launch of carbon emission futures will help improve the national carbon market, strengthen the basic role of the carbon market in guiding the optimal allocation of emission reduction resources, and promote green economic and social development.

3. Deepen inclusive finance

In the field of inclusive finance, the "insurance + futures" model has been continuously optimized and penetrated into the grassroots, providing a solid guarantee for rural revitalization and the stability of farmers' income. The services of futures operating institutions have been further reduced, covering more small, medium and micro enterprises, so that futures prices and tools can benefit a wider range of market players, and the popularity and accessibility of risk management services have been improved.

Fourth, support pension finance

For pension finance, the financial futures market will broaden the product range and improve operational efficiency, better support pension hedging transactions, and ensure the stability of pension income. This initiative is of great significance for enhancing the livelihood security of the elderly group.

5. Promote digital finance

Finally, in terms of digital finance, the digital transformation of various operators in the futures market has accelerated, improving the quality and efficiency of futures and derivatives services. The digital technology cultivated by the futures market will also spill over to the spot market, driving the optimization and upgrading of the commodity spot market, improving its credit level and development quality, and building a more intelligent and efficient financial market ecosystem.

Interpretation 4: Expand opening-up and deepen international cooperation

The China Securities Regulatory Commission will unswervingly promote the high-level opening up of the futures market, adhere to the direction of market-oriented and law-based reform, sincerely welcome global investors to participate in the construction of China's futures market, and share the dividends of China's economic reform and development.

1. Continue to increase the number of open varieties

In order to promote the participation of international capital, the China Securities Regulatory Commission (CSRC) will steadily promote the inclusion of eligible futures and options varieties in the scope of specific varieties and directly introduce overseas traders. At the same time, we will expand the variety of commodity futures and options trading that qualified foreign investors can participate in in batches and in an orderly manner, so as to enrich the choices of international market participants.

2. Expand cross-border cooperation

The China Securities Regulatory Commission (CSRC) actively supports domestic and foreign exchanges in carrying out diversified cross-border business cooperation. This includes innovative forms such as settlement price mandates, cross-border commodity ETFs, and allows overseas exchanges to launch financial products linked to onshore futures prices. This move will not only help enhance the international influence of China's futures prices, but also help China's futures prices to enter the world stage.

3. Strengthen regulatory exchanges and cooperation

While promoting opening-up, the China Securities Regulatory Commission (CSRC) is committed to building a futures regulatory system with Chinese characteristics that is compatible with the open environment. We will study and learn from the advanced experience of mature overseas markets to accelerate the formation of more inclusive and adaptive international regulatory rules. By strengthening exchanges and cooperation with international counterparts, the CSRC aims to establish an efficient regulatory system that meets international standards and has Chinese characteristics to ensure the stable and healthy development of the market.