China Futures Association

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China Futures Association
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Founded 2000
Headquarters Beijing
Web site http://www.cfachina.org/

The China Futures Association (CFA) was established on Dec. 29, 2000 and is registered and headquartered in Beijing. It acts as the bridge between the government and the futures market, exercising self-regulation and safeguarding the legitimate interests of its members. It also pushes for the development of China's futures market by maintaining transparency and fairness and by providing training on professional ethics. CFA members include futures brokerage firms, futures exchange special members and licensed individual futures traders.[1]

It is supervised by the China Securities Regulatory Commission and other agencies that regulate state social groups. CFA's foundation was intended to promote market development.[2]

The effort to set up the CFA started in 1995, based on the "Social Group Registration and Management Act" for the establishment of a nationwide industry self-regulatory organization, as a non-profit social group corporation.


History of Futures in China

Main article: History of Futures in China

China's futures market, set up in 1990, experienced a quick expansion until the mid 1990s, when loopholes in the regulatory scheme led to irregularities like fraud and strong speculation.[3]

A host of scandals forced the authorities to start cleaning up the market. Many futures exchanges and brokerages were closed down and some products were suspended from trade. China shut its bond futures market and barred the trade of financial derivatives, limiting China's exchanges to handling futures based on commodities. In 2005, China bond forward trading was introduced in the marketplace. This was seen as a positive step toward the development of other needed derivatives.[4]

Transaction volume, which totalled 10 trillion yuan (US$1.2 trillion) in 1996, declined to a low of 1.6 trillion yuan (US$192 billion) in 2000. It recovered to a record high of 11 trillion (US$1.3 billion) in 2004.[5]

In May 2015, the CFTA signed a Memorandum of Understanding with the Dubai Gold & Commodities Exchange (DGCX) seeking to enhance ties between the markets of China and the UAE, with a focus on increasing interaction between key players in the derivatives industry.[6]

Products and Services

Membership

The CTA mainly consists of futures brokerage companies as corporate members and futures exchanges as special members. "Corporate members" refers to futures brokerage companies and other institutions that the China Securities Regulatory Commission approves and regulates. As of September 2003, the CFA has a total of 189 members, including 186 corporate members and three special members. CFA members are located throughout the country, but mostly in Shanghai, Beijing, Zhejiang, and Guangdong.

Key People

Resources

Charter of the China Futures Association

References

  1. DGCX Expands Ties With Chinese Market With China Futures Association MOU. Mondovisione.
  2. Chinese Futures Association Established. People's Daily.
  3. Scandal Besets Chinese Markets. The New York Times.
  4. China Bond Forwards Seen as First Step in Financial Derivatives Development. Forbes.com.
  5. Brighter Prospects for Chinese Futures Market. China Daily.
  6. DGCX Expands Ties With Chinese Market With China Futures Association MOU. Mondovisione.