Large foreign firms have started to plan their recruitment in the stock index futures sector following the recent announcement that China has agreed to allow Qualified Foreign Institutional Investors (QFII) to trade in these products.
Stock index futures are agreements to buy or sell an index at a set price on a future date. The move by China was widely hailed by the financial services sector, especially foreign banks and asset management companies, which until now had limited options in hedging risks in China’s volatile stock market.
Both foreign joint ventures in China as well as foreign investors under QFII will be allowed to trade in the derivative.
Jason Tan, manager for banking and finance at Robert Walters, says at least one foreign bank has been given an informal nod by Chinese regulators to trade stock index futures, and has begun seeking qualified professionals to run the business.
“We have gotten requests from clients for index futures sales people. We have been approached by other banks as well to find these index futures sales people, but some of these banks which have made inquiries may not have the license yet,” says Tan.
The announcement is initially expected to create new jobs in capital markets sales, and in settlements at a later stage. So far, banks are looking for professionals with at least 10 years’ sales experience, comments Tan.
A spokeswoman for UBS, which holds the largest QFII quota, says the bank is waiting for the China Securities Regulatory Commission to promulgate its rules for participation in the futures market. “If all QFIIs are allowed to participate [in stock index futures trading], then of course UBS will play a part,” she adds.
Other large QFII quota holders include Citi, Deutsche Bank, HSBC, as well as Japanese investment house Nikko Asset Management. At last count, there are close to 90 financial services firms who are members of QFII.
At least two asset management firms, Martin Currie and AMP Capital Investors, have reportedly said they plan on trading in China stock futures once they are allowed.