(Adds details on development of China futures market)
HONG KONG Feb 17 UBS AG said its
Chinese securities unit has agreed to buy a majority stake in a
Chinese futures broker, hoping to profit from an increase in
trading of the financial products as China seeks to encourage
UBS Securities Co Ltd will inject 90 million yuan ($14.8
million) into Shanghai Pumin Futures Brokerage Co Ltd, giving
the Swiss bank a 95.42 percent stake in Pumin Futures, the bank
said in a statement on Monday.
Chinese regulators have implemented a series of
administrative rules for futures trading, but the lack of a
legal foundation has hindered the development of futures,
China's National People's Congress said in its December
China launched its Hushen 300 index, the first stock index
futures to begin trading on the mainland, in April 2010 after a
three-year trial in which brokers could practice trading the
That development added the first futures contract whose
underlying product was financial, to the existing pool of
commodities-based futures already traded in China.
Those products are traded on the Zhengzhou Commodity
Exchange, Dalian Commodity Exchange and Shanghai Futures
Exchange. A fourth exchange, the Shanghai Financial Futures
Exchange, was established in 2006.
Foreign investment in Chinese futures brokers has been
limited in the past by regulatory barriers. Galaxy Futures Co
Ltd, CITIC Newedge Futures Co Ltd and J.P. Morgan Futures Co Ltd
were the only Chinese futures firms with foreign investors,
Caixin magazine reported in May 2012.
Trading volume of financial futures, including the Hushen
index and newly introduced treasury futures, reached 141
trillion yuan in 2013, UBS Securities said in its statement.
($1 = 6.0668 Chinese yuan)
(Reporting by Denny Thomas and Lawrence White, additional
reporting by Gabriel Wildau; Editing by Matt Driskill and Jeremy