When they were issued by the China Banking Regulatory Commission CBRC, the rules represented a significant shift in the official attitude towards derivatives, at least as far as financial institutions were concerned. Previously, such institutions could only engage in derivative transactions for ôhedgingö purposes but not for ôspeculativeö purposes pursuant to a circular issued by PeopleÆs Banks of China in 1995. The general rule of thumb, which still applies to corporates, was that derivatives could only be entered into for hedging purposes.
Now, upon obtaining derivatives approval from CBRC...
