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Shanghai Futures Exchange will open its doors to foreigners to help internationalise the renminbi

Shanghai Futures Exchange released on Tuesday draft proposals to open up domestic futures markets to foreign investors and brokers in an effort to internationalise renminbi.

China is by far the largest consumer of industrial materials, but a large part of its trade is based on benchmarks from overseas. ShFE has been developing plans for years to expand its global presence, and compete with the London Metal Exchange.

The exchange stated that the 34 proposals, which range from options trading, hedging, and tin futures to help "internationalise the Renminbi" and "fully introduce overseas players", aim to “fully introduce overseas participants” and to help internationalise renminbi.

Tiger Shi, CEO at BANDS Financial, said: "This announcement is a fundamental change in the ShFE's opening process." Access for foreign investors to the entire ShFE product line is now on a rapid track.

Changes being considered include the ability for foreign brokers and traders to enter the exchange directly, rather than through an intermediary onshore as it is today. Participants could also post margins using foreign currencies, such as the U.S. Dollar.

Public comments on the draft rule changes for 18 products, including alumina and nickel, as well as copper cathodes are open until June 4.

(source: Reuters)