A number of Shenzhen’s deputies to the National People’s Congress (NPC), the country’s top legislature, have jointly submitted a proposal calling for the establishment of a futures exchange in Shenzhen, Shenzhen Special Zone Daily reported Sunday.
The submission of the proposal was led by Yang Xusong, a member of the Party group of the Standing Committee of the Shenzhen Municipal People’s Congress.
Yang pointed out that while the current four Chinese futures exchanges play important roles in price discovery and risk hedging, they have some shortcomings, such as the disadvantages in capital strength, business coverage, products and services, lack of diversity in trading varieties, and insufficient participation of industrial users and overseas investors.
“China needs to establish a new futures exchange,” Yang said, adding that it is consistent with the need to serve the transformation of economy and the opening of the financial sector to foreign competition.
In the proposal, Yang proposed that Shenzhen has unique advantages in industrial foundation, location and financial innovation. It is suggested that a comprehensive, open and innovative futures exchange in Shenzhen be established through joint efforts with Hong Kong and Macao.
It is proposed that the trading rules of the new exchange should be in line with international practices, open to overseas investors, establish a global delivery network, and adopt blockchain, Internet of Things and other new technologies.
Meanwhile, the exchange should not only offer commodity futures and financial futures, but also innovative futures such as digital assets.
Other products and services include options and derivatives trading, over-the-counter derivatives trading and clearing services, and other supporting services such as registration and clearing, settlement, depository, market data and information technology services.
In Yang’s view, the new futures exchange can take the lead in launching new and high-tech futures such as those for graphene, rare earth, silicon, electronic devices, integrated circuits, sensors and hydrogen to serve the transformation and upgrading of high-tech industries.