Chinese regulator extends derivatives transition period
The China Banking Regulatory Commission (CBRC) has extended the transition period for its new derivatives licensing regime, giving banks an extra three months to get licences in place that will allow them to trade derivatives onshore.
“Some departments received a lot of applications,” said Li Fuan, CBRC deputy director-general of the supervisory rules and regulatory policy department in Beijing. “For officers to review these and make proper evaluations will take time.”
A slew of banks have applied to their local CBRC branches for licences since the new regulations came into force. The CBRC needs to approve the application at the local level and in its Beijing headquarters.
The new regulations allow licensed local and foreign banks to trade derivatives on their own accounts for profit – previously they were only allowed to use them to hedge. Licensed foreign banks will also be able to do business with domestic corporate clients onshore. Previously, foreign banks were permitted to trade only with Chinese financial institutions.
Banks that have so far been given the go-ahead include ABN Amro, Bank of Tokyo-Mitsubishi, Citigroup, Credit Suisse First Boston, Mizuho Bank and Standard Chartered. Others such as Deutsche Bank, HSBC and JP Morgan Chase are still waiting.
Feng Gao, Deutsche Bank’s co-head of global markets for China, says he is hopeful the bank will be given the green light “soon”. And an HSBC spokesperson in Hong Kong said, “The CBRC Shanghai Branch has approved our application and we’re awaiting approval from the CBRC head office in Beijing.”
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
EC’s closing auction plan faces cool reception from markets
Participants say proposal for multiple EU equity closing auctions would split price formation
Fed pivots to material risk – but what is it, exactly?
Top US bank regulator will prioritise risks that matter most, but they could prove hard to pinpoint
Hopes rise for EU re-entry to UK swaps market
EC says discussions on draft decision softening derivatives trading obligation are ‘advanced’
BoE’s Ramsden defends UK’s ring-fencing regime
Deputy governor also says regulatory reform is coming to the UK gilt repo market
Credit spread risk: the cryptic peril on bank balance sheets
Some bankers fear EU regulatory push on CSRBB has done little to improve risk management
Credit spread risk approach differs among EU banks, survey finds
KPMG survey of more than 90 banks reveals disagreement on how to treat liabilities and loans
Bowman’s Fed may limp on by after cuts
New vice-chair seeks efficiency, but staff clear-out could hamper functions, say former regulators
Review of 2025: It’s the end of the world, and it feels fine
Markets proved resilient as Trump redefined US policies – but questions are piling up about 2026 and beyond