Li Haichao, Member Of The Party Committee And Deputy General Manager Of CICC: Actively And Steadily Promote The Supply Of New Exchange Rate Futures Products

"From April 16, 2010 to the end of October 2020, the financial futures market has completed 1.18 billion hands, 1117.2 trillion yuan..."

On November 28, Li Haichao, member of the Party committee and deputy general manager of China Financial Futures Exchange, presented such a set of data on the spot of the 2020 annual meeting of the southern finance and Economics International Forum.

Information map.

Since the first domestic financial futures product Hushen 300 stock index futures was listed in April 2010, the domestic financial futures market has experienced ten years of development, and the product supply level has achieved remarkable results.

So far, CFSE has listed two product lines of equity and interest rate, with a total of 7 Financial Futures and options, including three stock index futures products of CSI 300, SSE 50 and CSI 500, three treasury bond futures products of 2-year, 5-year and 10-year, and one stock index option product of Hushen 300.

In the future, exchange rate futures are expected to be launched on the basis of stable and mature operation of the above financial futures products.

Li Haichao pointed out that CICC will actively and steadily promote the supply of new products of stock index, interest rate, exchange rate futures and options around the key work of the capital market during the "14th five year plan" period, and strive to establish and improve the domestic risk management supply and demand market that is compatible with China's economic status, the development process of financial market and the needs of capital market reform.

At that time, the basic "jigsaw" of domestic financial futures market will be supplemented by interest rate futures.

It should be pointed out that in the past decade, CICC's stock index futures, treasury bond futures and other products have had a profound impact on the domestic financial market.

Taking the earliest and most mature stock index futures as an example, Li Haichao mentioned three obvious changes in the securities market.

Firstly, since the listing of stock index futures, the hedging effect has been gradually unfolded, and the hedging efficiency has been maintained above 96%, which has promoted the positive changes in the stock market operation. Compared with before and after the listing of stock index futures, the annualized volatility, intraday volatility, intraday amplitude and days of sharp rise and fall of stock index futures are significantly reduced.

Second, the establishment of the hedge mechanism of stock index futures can promote mutual funds and private funds to absorb social funds and provide support for stock market financing. By the end of 2019, the size of funds tracking CSI 300, CSI 500 and SSE 50 indexes increased by 288.4%, 22.6% and 45.7% respectively compared with the corresponding index futures when they were listed.

Third, as a basic derivative, the listing of stock index futures has spawned many new strategies, new transactions and new opportunities, improved market trading technology and competitive skills, supported the development of new business of financial institutions, promoted product innovation, and promoted the application of new strategies, which not only stimulated the wealth effect of the market, but also further deepened the process of market institutionalization.

On this basis, the stock index option products provide a more refined risk management tool for the market. It is helpful to construct and realize more diversified trading strategies by allowing investors to avoid risks and retain the opportunity to hold stock spot returns.

Especially this year, due to the impact of the new crown epidemic, the domestic stock market volatility has increased. On the basis of its stable operation, CSI 300 stock index options have effectively played the "insurance" function.

On the other hand, stock index options also provide positive support for regulatory decision-making departments to study and judge risks. The volatility index compiled by stock index options trading information can effectively reflect market sentiment.

"At present, central banks in many countries all over the world use this method to study and judge market risk and serve the monitoring of financial system. From the practice since the listing of Shanghai and Shenzhen 300 stock index options, the corresponding volatility index market change is more effective, which provides a reference index for observing market sentiment Li Haichao pointed out.

He also said that in the future, CICC will put scientific and technological innovation in a more prominent position, and promote the construction of a new trading and regulatory model of financial futures market supported by scientific and technological means. We should improve the basic system of the financial futures market, further optimize the rules and regulations system, optimize the contract rules, improve the trading mechanism, and enhance the inclusiveness, foresight and openness of the system.

In addition, we should give full play to the "joint forces" of the market, attract more medium and long-term funds into the market, promote commercial banks and insurance funds to participate in treasury bond futures trading more fully, and further optimize the participation of various medium and long-term funds in financial futures policies.

We should actively serve, build a new development pattern of "double cycle", steadily promote the high-level opening of the financial futures market, adhere to the principle of coordination with the opening-up of stock, bond and other spot markets, and broaden the channels for international investors to use financial futures.