TIMELINE - Major events in China's government bond futures market
SHANGHAI, Sept 5
SHANGHAI, Sept 5 (Reuters) - The China Financial Futures Exchange (CFFEX) will relaunch government bond futures trading on Friday after an 18-year hiatus. Following is a timeline for major events in the history of the important market.
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December 1992 -- China launched government bond futures trading of 12 different contract types on the Shanghai Stock Exchange, with only institutional investors being permitted to trade. It was the first financial derivative product ever launched in China since the ruling Communist Party came to power in 1949.
October 1993 -- The exchange permitted individual investors to participate in futures trading.
1994/1995 -- Trading in futures expanded to 14 exchanges, including 10 commodity futures exchanges that existed at that time. China has since merged the commodity futures exchanges into three.
Feb. 23, 1995 -- Wanguo Securities, the biggest Chinese brokerage at the time, found itself on the brink of bankruptcy after making large bad short bets in a three-year government bond futures contract. It tried to rig prices in the late session by building huge short positions without sufficient margin deposits. The manipulation was quickly discovered by the exchange, and related transactions were nullified. The brokerage was later forced to merge into the current Shenyin and Wanguo Securities. Wanguo's ex-president Guan Jinsheng was sentenced to 17-years in jail for deliberately breaking rules.
May 17, 1995 -- The China Securities Regulatory Commission (CROC) announced an indefinite suspension of trading in government bond futures.
September 2006 -- The China Financial Futures Exchange (CFFEX) was established to host trading of China's fledging derivatives.
April 16, 2010 -- The CFFEX launched stock index futures <0#CIF:>, the first and only product traded on the exchange until the relaunch of government bond futures.
December 2011 -- The CFFEX revealed for the first time that it was actively preparing to relaunch China's government bond futures trading.
February 2012 -- The CFFEX started simulative trading in government bond futures.
January 2013 -- Regulators stated at an industry meeting that government bond futures could be relaunched this year.
July 5, 2013 -- The CSRC announced that the State Council, or cabinet, had approved the relaunch of futures trading.
Aug. 30, 2013 -- The CSRC announced it had approved the CFFEX to restart trading in government bond futures on Sept. 6. (Reporting by Lu Jianxin and Pete Sweeney; Editing by Jacqueline Wong)