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Fang Xinghai:Promote the opening of the futures market to the outside world faster and deeper

Fang submitted 2020-07-03 15:26:09

Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission: Promote the opening of the futures market to the outside world faster and deeper

Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said at the listing ceremony of low-sulfur fuel oil futures on June 22 that the futures market should advance faster and deeper to open up to meet the more intense global competition after the epidemic.

Fang Xinghai pointed out that low-sulfur fuel oil futures is the third international variety listed on the Shanghai Futures Exchange. It has accepted the participation of foreign traders from the beginning, helping the construction of the Shanghai International Energy Trading Center and Shipping Center.

Fang Xinghai emphasized that the opening model of futures varieties should be diversified. Different futures varieties have their own characteristics, and the methods of opening should be flexible and diverse, changing according to the situation. While expanding the opening up in a specific variety mode, a variety of opening up modes including settlement price authorization and contract plug-in should also be carried out. After the opening of a variety, it is necessary to fully learn from global best practices, strengthen market promotion, further enhance the transaction convenience of foreign traders, improve supporting policies such as foreign exchange, extend overseas diplomatic services, and deepen domestic and foreign exchange business exchanges and cross-border cooperation. We need to continue to consolidate the achievements of opening up and effectively improve the global pricing power of China's futures market.

On the same day, Fang Xinghai pointed out at the Caixin Summer Summit Forum that he firmly supports the construction and development of the Hong Kong International Financial Center. Facing external pressure, the financial market has expressed optimism about the prospects of Hong Kong's international financial center.

"The status of Hong Kong's international financial center is very attractive, and its position is very stable." Fang Xinghai pointed out that many international investors gathered in Hong Kong to invest in the A-share market through Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. Therefore, relevant parties in Hong Kong are also very active in launching A-share-based derivatives in Hong Kong.

Fang Xinghai believes that a large number of international institutional investors need A-share-based derivatives to manage investment risks, and the launch of A-share-based derivatives in Hong Kong is reasonable. Over a long period of time, there will be a lot of foreign capital entering Hong Kong’s capital market through Hong Kong. Through Hong Kong, it is a major channel to enter the mainland’s capital market. Institutional investors in Hong Kong have better risk management methods, which will help them invest more funds in the mainland capital market, which is also a good thing for the development of the mainland capital market.

"Whether in terms of the development of Hong Kong itself or the development of the capital market in the Mainland, the launch of some financial derivatives based on A shares in Hong Kong is reasonable and should be supported." Fang Xinghai said.

In addition, Fang Xinghai believes that the internationalization of the RMB is also closely related to the development prospects of Hong Kong's international financial center, and the internationalization of the RMB should be accelerated in the next ten years. After clarifying the strategy of RMB internationalization, there will also be better answers to questions such as how to accelerate internationalization and make better use of the new opportunities provided by the current global financial markets. (China Securities Journal: Zan Xiuli, Zhao Baizhinan)

Speed up the legislative process and escort to deepen reform
The loudest call for futures law

On June 1, 2020, the 58th meeting of chairmen of the 13th NPC Standing Committee reviewed and adopted the adjusted 2020 legislative work plan of the NPC Standing Committee. On June 20, the adjusted legislative work plan was announced.

Focusing on promoting high-quality economic development and building a new level of open economic new system, the plan proposes to formulate a rural revitalization promotion law, futures law, Hainan Free Trade Port Law, etc.

Among the above-mentioned legislative projects to be formulated, what are the deficiencies in the relevant legal basis at this stage? What are the main effects on the high-quality development of my country's economy? "Securities Daily" reporter recently interviewed many industry insiders for analysis and interpretation.

Liu Junhai, a professor at the School of Law of Renmin University of China, told reporters at the Securities Daily that 2020 is the ending year of the 13th Five-Year Plan (2016-2020), the year of a decisive victory over all-round prosperity, and the year of decisive battle to win the battle against poverty. In order to fundamentally revitalize the countryside and promote rural urbanization in an orderly manner, it is necessary to lay the foundation for the rule of law.

It is understood that the “Law of the People’s Republic of China on the Promotion of Rural Revitalization (Draft)” submitted to the 19th meeting of the 13th NPC Standing Committee on June 18, is divided into eleven chapters. They are general principles, industrial development, talent support, cultural inheritance, ecological protection, organization construction, urban-rural integration, supporting measures, supervision and inspection, legal responsibility, and supplementary provisions, which include 76 articles in total.
Liu Junhai said that the "three rural issues" are related to people's livelihood. Promoting the modernization of rural governance, accelerating the development of agriculture and rural areas, and formulating laws for promoting rural revitalization will allow farmers to feel the warmth of the country's rule of law.

Liu Xiangdong, deputy director of the Economic Research Department of the China International Economic Exchange Center, told the Securities Daily reporter that the main legal basis for China's futures market at this stage is the relevant administrative regulations and the departmental regulations of the competent authority, including the "Futures Trading Management Regulations" and related management measures, etc. Promulgating the futures law is an urgent need to improve China's capital market legal system, as well as the need to prevent futures market risks.

In an interview with the Securities Daily, Wang Jun, Dean of Founder’s Intermediate Futures Research Institute, said that China has become the world’s second largest futures options market and the world’s largest commodity futures market, and has made considerable progress in the futures and derivatives markets. However, at present, there is no national law that specifically regulates the futures market and the futures industry. Under the general background that China’s futures and derivatives markets will further open to the outside world, attract overseas investors and financial institutions to participate, it’s necessary to speed up the formulation of China’s futures law.

Speaking of the importance of launching the futures law, Wang Jun said that first, from the national legal level, we need to ensure the long-term, stable and healthy development of China's futures market and futures industry. Second, it can protect the legal rights and interests of futures investors, and crack down on illegal or disguised futures trading from the national legal level, and promote the continuous development of the futures market and the futures industry in a good and orderly environment. Third, considering the breadth and depth of my country's futures market opening up to the outside world, how to protect the legitimate rights and interests of China's futures market players, investors, and enterprises, and promote my China’s futures market to become an important pricing center in the world.

Xiao Benhua, deputy dean of the Free Trade Zone Research Institute of Shanghai Lixin School of Accounting and Finance, told the Securities Daily reporter that according to the overall plan of Hainan Free Trade Port, a free trade port system will be initially established in 2025. The formulation of the Hainan Free Trade Port Law can build "four beams and eight pillars" for the construction of the Hainan Free Trade Port, and provide legal guarantee for the Hainan Free Trade Port's greater institutional innovation.

"The formulation of the Hainan Free Trade Port Law will, on the one hand, further enhance the confidence of domestic and foreign investors in investing in Hainan, and on the other hand, will also reduce barriers to Hainan's policy breakthroughs, thereby promoting Hainan's economic development." Xiao Benhua said.
Pan Helin, executive dean of the Digital Economics Research Institute of Zhongnan University of Economics and Law, told reporters from the Securities Daily that the law is the most important tool in governing the country. At present, Chinas economic development has put forward new requirements for legislation. Accelerating legislation in important areas can provide system guarantee for comprehensively deepening reform. The Hainan Free Trade Port Law escorts reform and opening up, the rural revitalization promotion law promotes economic and social development and the implementation of reform tasks, and the futures law helps to improve the construction of the capital market legal system. These legislative items are important guarantee for achieving high-quality development of China’s economy. (Securities Daily, Liu Meng)

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