China Brokers Seen Joining $2 Trillion Structured-Product Market
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China is preparing to let local brokerages sell structured products for the first time, allowing them to benefit from surging demand for complex investments tied to equities, currencies and other assets, according to lawyers involved in the market.
The Securities Association of China said in December it won regulatory approval for a trial over-the-counter trading program for products designed by local securities companies. The pilot program will allow China’s securities companies to create structured instruments using embedded options to enhance returns by giving them access to derivatives trading, from which they’d been previously excluded, according to lawyers at Linklaters LLP, a London-based law firm.