Market participants are becoming increasingly impatient as they await the much-delayed release of guidelines on the Chinese derivatives market. "Many people were too optimistic last year. It's been a slow process," said a trader at a bulge bracket house in Hong Kong. Guidelines for non-renminbi derivatives were widely expected to be released by last December (DW, 9/1) but the process has been held up, explained Li Fu An, deputy director general at the People's Bank of China in Beijing. "It's been slowed down by the recent [Chinese leadership] transitions," said Li. A new entity, dubbed the Regulatory Commission of Banking Industry, will be set up in the coming weeks to handle such issues as the guidelines. "This is one of the most important issues the new institution will handle once it's established," added Li. He declined to comment on a likely timeframe for the release.
"Obviously, we'd like to see this relatively soon," said Paulus Mok, head of treasury marketing at Citigroup in Shanghai, adding that with greater clarity derivative products will become more widely used. However, he added that it would take at least a year or two for renminbi derivatives to develop.
"We're keen to move things forward," said Angela Papesch, head of the Asia-Pacific office at the International Swaps and Derivatives Association in Singapore. She noted that ISDA will be meeting with Chinese regulators in June to discuss the guidelines as well as other issues. As for a release date, Papesch noted that given indications she has received from the regulators, "summer might be too optimistic but hopefully before year-end."
