At the routine press conference of the China Securities Regulatory Commission held on Friday last week (October 11), the spokesman of the CSRC said that the CSRC has approved the listing of the iron ore futures contracts on Dalian Commodity Exchange and the specific time of the listing shall be determined by DCE in accordance with the market conditions and the progress of the preparations.

 

It is learnt that on October 9 the CSRC signed and issued the Official Reply on Listing Iron Ore Futures Contracts on Dalian Commodity Exchange in which the CSRC has required DCE to be highly responsible, and further make effective preparations before the listing in accordance with the instruction of high standards, stable start so as to ensure the smooth introduction and stable operation of the iron ore futures.

 

After the listing of the iron ore futures, according to the basic requirement for serving the real economy, DCE shall pay close attention to the situation of the iron ore spot market and effectively prevent and resolve the market risks; DCE shall strengthen the market supervision over the iron ore futures, and effectively fulfill the responsibilities of regulation and service in trading, settlement, delivery, inspection and other important processes; DCE shall step up the efforts in the market training and the cultivation of the institutional investors, and vigorously introduce industrial clients. The important issues shall be reported to the CSRC timely in the course of organizing the trading of the iron ore futures contracts.

 

In 2007, DCE included the iron ore in the products reserves and stepped up the efforts in research and development after 2009 and on the basis of extensively soliciting opinions from all parties DCE has completed the design of the draft of the iron ore futures contracts. After DCE obtained the approval to carry out the trading of the iron ore futures in early September, it openly solicited opinions from all market participants on the iron ore contracts and relevant rules and the contracts and the detailed rules, which were improved according to the opinions from the market, were submitted to the CSRC for approval after being discussed and passed by the Council.

 

The listing of the iron ore futures contracts approved by the CSRC shows the regulators' recognition of the China version iron ore futures contracts based on the physical delivery that were designed by DCE. It is learnt that the development of the international derivatives market long found the absence of the iron ore products which boast a strategic position with the key reason lying in the less price volatility under the traditional iron ore pricing model and the lack of the enterprises' demand for hedging.