Ten futures companies were approved by the China Financial Futures Exchange (CFFEX) to become the first group of members of the exchange, the CFFEX announced on Monday.

"Now, everything is ready for the launch of CSI300 index futures," said Hu Yuyue, a well-known expert on financial futures in China.

The CFFEX is the only exchange in China focusing on financial futures. It has been preparing for the launch of the index futures since its establishment in September 2006.

Rumors concerning the launch of the index futures have been circulating since last winter.

According to the CFFEX, Guotai Junan Futures and Nanhua Futures obtained full clearing membership, Zhejiang New Century Futures and other four futures companies were given clearing membership, and three futures firms were handed trading membership.

The CFFEX said it would construct a pyramid-like structure of members, with those with clearing membership at the top. However, it did not specify what privileges each level of membership would bring.

The CFFEX has set up the system to encourage mergers of China's numerous small-scale futures firms. It said the registered capital of full clearing members should be more than 100 million yuan.

China's securities companies have rushed to purchase futures firms. Bigger futures companies have managed to inject capital, as they are attracted to the country's financial futures products, especially CFFEX's first product CSI300 index futures.

Analysts expect that about ten futures companies will become full clearing members of CFFEX. It currently has about 30 clearing members.

With a registered capital of 160 million yuan, Guotai Junan Securities Co. Ltd set up the Shanghai-based Guotai Junan Futures via the recent acquisition of Pufa Futures.

Hangzhou-based Nanhua Futures has been engaged in financial and commodity futures and options for more than ten years. It has become one of China's top ten leading futures brokers.

(Xinhua News Agency October 23, 2007)