China's Asset Management Association of China is tightening rules on risk, aimed at asset managers for financial companies and futures brokers. This move has triggered an exodus of institutional cash from the nation's commodities futures markets and hit a thriving niche business for brokers. The Chinese government said in late January that it would tighten its capital requirements to rein in risks posed by speculative investments such as those made through derivatives trading. This slump in trade is a blow for Shanghai Futures Exchange and the Dalian Commodity Exchange, which run China's largest commodity futures contracts.
China's Asset Management Association of China is tightening rules on risk, aimed at asset managers for financial companies and futures brokers. This move has triggered an exodus of institutional cash from the nation's commodities futures markets and hit a thriving niche business for brokers. "The new rules made the launch of structured products nearly impossible," said Hicend Futures' Ni Chengqun. This slump in trade is a blow for Shanghai Futures Exchange and the Dalian Commodity Exchange, which run China's largest commodity futures contracts.