China: Futures Take Dragon Steps
Is an exchange still an exchange if no product is listed and nothing trades? That’s the conundrum the leadership of the China Financial Futures Exchange (CFFEX) must be puzzling over these days. Inaugurated with fanfare and great anticipation last September, the fledgling exchange is creeping toward its first birthday with nary a trade in sight. What gives?
http://www.fiaasia.org/fi-magazine-home.asp?a=1198

Japan: Working to Improve Global Presence
The last two decades have seen the global derivatives industry grow dramatically. However, over the last few years, the Japanese derivatives markets have been the subject of significant discussion and analysis by industry members as both financial and commodity markets have been lagging behind the global demand for greater technology, easier accessibility, and more diverse product offerings.
http://www.fiaasia.org/fi-magazine-home.asp?a=1199

Taiwan: Looking Abroad for Market Growth
As the Taiwan Futures Exchange marks its 10th anniversary this year, the Taiwan futures community has much to celebrate. Taiwan is fortunate in being centrally and strategically located on the Western rim of the Pacific, equally accessible from its large neighbor to the North, as well as other Asian countries from all points of the compass.
http://www.fiaasia.org/fi-magazine-home.asp?a=1200

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China has “No Timetable” to Launch Index Futures
Informal comments at the World Economic forum in Dalian, the CSRC director general of research and stratey Qi Bin said the regulator had “no timetable” in place for the launch of stock index futures. Earlier at the same event Shang Fulin had said that China was “basically ready” and that the contract will be launched “when conditions are ready.”
http://www.forbes.com/markets/feeds/afx/2007/09/06/afx4087003.html

SGX Members Allowed to Give U.S. Customers Access to Expanded Range of Markets
The Commodity Futures Trading Commission has issued an amended supplemental order that allows certain members of the Singapore Exchange to handle trading for U.S. customers on other foreign exchanges. According to a Sept. 4 announcement, the CFTC’s order authorizes SGX members “to solicit and accept futures and options orders from U.S. customers for transactions on all non-U.S. exchanges where such members are permitted by the laws of Singapore to conduct futures business for customers.” Previously, SGX members were authorized to solicit and accept futures and options orders from U.S. foreign futures and options customers only for transactions on SGX and Eurex.
http://www.cftc.gov/newsroom/generalpressreleases/2007/pr5378-07.html

China to End JV Moratorium
China announces plans to end the moratorium on joint ventures, which has been in effect for three years. The moratorium had been put into effect to allow “restructuring” of the domestic brokerage industry, according to Shang Fulin, chairman of the China Securities Regulatory Commission. China’s Deputy Prime Ministry, Wu Yi, had pledged during a May meeting with U.S. Treasury Secretary Henry Paulson to open the Chinese securities industry to overseas firms to comply with the WTO rules. The government has closed more than 20 brokerage firms for malpractice and for losses, shrinking the industry by a third, Shang said.
During the stock market boom of the past three years, the capitalization of China’s stock market has expanded almost sevenfold to a record $3.1 trillion.
Shang also said the government has almost completed preparations to let the mainland investors trade futures contracts based on stock indexes.
http://www.iht.com/articles/2007/09/06/news/sxbrokers.php

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China Analysis by Nomura Asset Management
The chief portfolio analyst for Nomura Asset Management, Hong Kong, reports that Nomura is optimistic about the investment environment over the longer term. His report reviews the evolution of economic policy since the early economic reforms of Deng Xiaoping in the late 1970s, and describes some of the news directions we can expect in the next phase of development.
http://globalpensions.com/feature/feature_pdf_1300.pdf

Fred Grede Appointed Manger of Sentinel
Fred Grede, the former chief executive of the Hong Kong futures exchange has been appointed to oversee operations of Sentinel Management Group Inc., a $1.5 billion money-management firm that is facing fraud allegations by the Securities and Exchange Commission. Grede was selected by the U.S. trustee monitoring the bankruptcy, in consultation with the SEC, Sentinel and its creditors, according to court documents.
In a lawsuit, the SEC said Northbrook-based Sentinel mixed at least $460 million of client funds into one of the firm’s own accounts without the clients’ knowledge. Client securities were also used as collateral for Sentinel to obtain a $321 million credit line that now is in default.
http://www.chicagotribune.com/business/chi-070830-sentinel,0,7089368.story?coll=chi_tab04_layout

Trading Technologies, Inc Announces Asia Expansion
Trading Technologies International, Inc. today announced it is expanding its Asian exchange connectivity through new initiatives with the Tokyo Commodity Exchange and Singapore Exchange.
http://www.tradingtechnologies.com/article.aspx?id=224

China Passes First Anti-Monopoly Law
China just passed its first anti-monopoly law 14 years after it was first proposed. Some foreign investors have expressed concern that its impact will be an impediment to foreign firms seeking to establish and grow a presence in China.
http://www.ft.com/cms/s/0/cef60ce0-5713-11dc-9a3a-0000779fd2ac.html

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China May Lower Threshold for Outbound Investment
The CSRC has announced it may lower the threshold for outbound investment under so-called QDII rules to one-third the current levels, according to a report by Xinhua. According to a source, the current level of 300,000 yuan is too high a hurdle for most investors seeking access to foreign markets. So far a total of seven funds have gained government approval to conduct QDII business.
http://www.chinadaily.com.cn/bizchina/2007-09/06/content_6086757.htm

U.S. Investment Fund Builds Osaka Stock Exchange Stake
A U.S. investment fund, Indus Capital Partners, has bought a stake in the Osaka Stock Exchange excess of the threshold 5% after which disclosure to authorities is required. The investment raises the question whether the OSE will become a target in the global consolidation of exchanges.
Click here to read more

Hong Kong Government Increases Stake in Exchange
The Hong Kong government has increased its stake in the Hong Kong Exchanges and Clearing (HKex) passed the 5% threshold to 5.88% recently, according to The Standard. The Hong Kong government is the the exchange’s single largest shareholder. The article cited sources saying the government wanted to get more involved in the management of the exchange in line with action items detailed in a report issued in January. That report proposed creating a platform for cross-trading securities listed in Hong Kong and the mainland and other links to mainland exchanges.
http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=53093&sid=15286164&con_type=1

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Japan Says Final Bye to Open Outcry
The Central Commodity Exchange of Japan, or C-Com, launched a new computer system on September 3, thereby pulling the final curtain on nearly three centuries of open outcry markets in Japan. Contracts including the rubber index, aluminum, and nickel traded their last open outcry “Itayose” sessions on August 31. According to the exchange’s summer newsletter, the new “Advanced Itayose System” features greater flexibility and efficiency, including direct electronic market access. Trading hours were also extended as a result of automation. Japan first started trading futures market with the launch of rice futures in Dojima in 1730, thought by some historians to have been the world’s first true futures markets.

News from HKex
The HKex introduced options on three new Mainland stocks recently, theJiangxi Copper Company ltd., China CITIC Bank Corporation Ltd., and China Coal Energy Co., Ltd. , according to the exchange’s recent newsletter. HKex’s stock options market has been growing by leaps and bounds this past year, from a monthly volume of about 1.7 million contracts last September to 5 million in August. The Newsletter also provides statistics on the growth of the HKex block trading facility and describes the new, larger order size limits.
http://www.fiaasia.com/emarketbeat/hkexupdates.pdf

Chinese Officials visit Argentina’s Rosario Board of Trade (ROFFEX)
The delegation included Jiang Yang, Vice Chairman of the CSRC, and Yang Mai Jun, CEO of the Shanghai Futures Exchange (SHFE). According to a press release by the exchange, the Chinese visitors were particularly interested in the fact that ROFFEX traded both financial and commodity futures.

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News from FIA Japan Chapter:

Give-up System Delayed at Tokyo Stock Exchange
The FIA Japan Chapter reports that the Tokyo Stock Exchange has announced that the implementation of their new trading system would be deferred to January 2008 from October 2007. As a result, the introduction of the give-up system will be delayed.

OSE to Introduce Evening Session
In other news from Japan, the Osaka Securities Exchange will introduce an evening session for all its stock index futures and options, such as the Nikkei 225.

Japan Chapter Discusses Report of Japanese “Working Group”
The FIA Japan Chapter wrote a critique of the recently issued report of the Cabinet Office by the Working Group on Financial and Capital Markets. The FIA-J’s analysis, in which they express the need for “urgent action,” can be accessed on the FIA Japan Chapter’s site as well as the FIA site.
The full newsletter of the Japan Chapter can be accessed at: http://www.fiaasia.com/japan/downloads/FIAJ_Newsletter_2007_07.pdf