New regulations, which came into effect on March 1, mean licensed local and foreign banks can now trade derivatives on their own accounts for profit. Before, derivatives could only be used for hedging.
The rules also permit licensed foreign banks to conduct business directly with domestic corporate clients in China. Previously, they were only allowed to trade foreign currency-denominated derivatives with Chinese financial institutions that had appropriate foreign exchange licences.
The CBRC originally set a six-month transition period for banks to apply for derivatives licences. This was then extended to November 31 to give the Chinese regulator more time to process applications.