When it comes to equity markets, China never does anything hastily. So, before Beijing introduced stock index futures trading on the mainland, it set up an exchange that spent more than three years practising; sent regulators to tour the country educating potential investors; established a 30-minute examination investors must pass before they are allowed to trade; insisted on high deposit and margin requirements; and banned foreigners from taking part.
Then last April, China finally passed an important milestone on the path to being a market-driven economy by announcing the start of stock index futures trading in mainland China. This is part of a broader transformation of mainland markets that has also included the introduction of a pilot programme of short selling and margin trading of equities this year.
Trading began with contracts based on the CSI 300 index, which tracks the Shanghai and Shenzhen markets. Only investors who maintain a minimum deposit of Rmb500,000 ($74,845) are allowed to trade, and there is a 15-18 per cent margin requirement.