Deutsche gets China derivatives licence

Deutsche Bank has become the latest institution to gain a licence to trade derivatives onshore in China. A Deutsche official in Singapore told RiskNews that the China Banking Regulatory Commission (CBRC) gave the German bank the go-ahead yesterday.

Deutsche joins a growing number of banks that have been given the green light to trade derivatives in China. The list includes: ABN Amro, Bank of Tokyo-Mitsubishi, HSBC and the Shanghai Pudong Development Bank.

Under new regulations, which came into effect on March 1, licensed local and foreign banks can trade derivatives on their own accounts for profit. Previously, derivatives could only be used for hedging.

The rules also allow licensed foreign banks to conduct business directly with domestic corporate clients onshore. Before, they were restricted to trading foreign currency-denominated derivatives with Chinese financial institutions that had appropriate foreign exchange licences.