Rules could be relaxed if QFII index futures trading is successful

On May 6, the China Securities Regulatory Commission (CSRC) released new regulations that allow qualified foreign institutional investors (QFIIs) to trade stock index futures (SIFs) in China.

Although the Guidelines for the Participation in Stock Index Futures Trading by Qualified Foreign Institutional Investors (合格境外机构投资者参与股指期货交易指引) allows QFIIs to trade SIFs, there are two key restrictions: 1) they may trade for hedging purposes only and cannot sell overseas derivatives products based on the SIFs and 2) they must comply with applicable daily trading limits.