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Derivatives

BNP Preps China 'A' Share Entry

BNP Paribas is gearing up to offer market access derivatives linked to Chinese 'A' shares in the coming weeks on the back of receiving approval from regulators.

BNP Paribas is gearing up to offer market access derivatives linked to Chinese 'A' shares in the coming weeks on the back of receiving approval from regulators. "Many clients and institutions have interest in China and are looking for access," said Laurent De Meyere, managing director and Asian head of equity derivatives at BNP in Hong Kong. BNP last week was granted qualified institutional investor status and is now awaiting its quota allotment, which will allow it to directly trade mainland 'A' shares. It should receive this before year-end. De Meyere expects strong end user interest in the short-term due to a pipeline of IPOs nearing launch.

Once BNP fully enters the market it will begin offering market access derivatives, such as certificates and notes, that replicate exposure to the equities.

The market in derivatives referenced to 'A' shares started last year when Citigroup, Nomura Securities and UBS received the first batch of licenses to trade the domestic shares (DW, 6/15/03) and since then some 19 institutions have plunged into the market, most recently Fortis Bank and ABN AMRO (DW, 9/10).

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