International derivatives shops, including Citigroup, HSBC, Bank of America and Standard Chartered, are getting ready to start dealing directly with Chinese end users on the back of receiving new derivative licenses imminently. Ying Ying Xu, head of global markets at Standard Chartered in Shanghai, said the bank could obtain its license as early as the end of the month.
The licenses are part of a rule change by China Banking Regulatory Commission in February that allows foreign firms to enter onshore non-renminbi derivatives directly with Chinese end users (DW, 2/22). Xu said the regulations will also permit end users to enter derivative positions for speculation in addition to hedging.
Angela Papesch, head of the Asia-Pacific office at the International Swaps and Derivatives Association in Singapore, said, "Most institutions that have been interested in China previously have already put in their application forms."
