Dalian Commodity Exchange (DCE) and China Financial Futures Exchange (CFFEX) have just announced that they had been officially recognized by the China Securities Regulatory Commission (CSRC) as qualifying central counterparties (QCCPs).
DCE, CFFEX as well as other major futures exchanges in China have been performing the function of central counterparties in futures trading.
According to CSRC, a central counterparty refers to:
a legal person who, upon the conclusion of a futures transaction, interposes itself between the counterparties to the transaction, becoming the buyer to every seller and the seller to every buyer, and who undertakes settlement on a net basis, to centrally guarantee the performance of such futures trading.
The PRC regulators have already taken actions to promote and open up China’s futures markets. Last year, China granted foreign access to crude oil, iron ore and PTA futures contracts. Foreign investors were also given permission to hold majority interests of up to 51% in futures companies, with this restriction being lifted by 2021.