On May 4, China’s iron ore futures will officially allow trading by overseas institutional investors. This marks the second futures product in China to be opened up to foreign participation, following crude oil futures, and also signals that China’s financial sector is accelerating its opening-up process.

　　It is reported that iron ore futures were listed on the Dalian Commodity Exchange on October 18, 2013, at which time trading was limited exclusively to domestic mining and steel companies. Starting tomorrow, China’s iron ore futures will officially allow overseas traders to participate; currently, all preparatory work has been completed.

　　Chen Wei, Director of the Industrial Products Division at the Dalian Commodity Exchange, said that the exchange has conducted countless system tests on its platform and has already carried out two full-market tests. Based on the results of these full-market tests, the exchange now meets all the necessary conditions for launching overseas trading. According to available information, the introduction of iron ore futures to overseas traders will be carried out while maintaining the original contract specifications, underlying institutional framework, core technical systems, core clearing and risk-control models unchanged. Settlement will be conducted in RMB, and overseas traders will participate through domestic futures company members and via sub-delegation arrangements with overseas brokerage firms. Overseas funds will be managed in accordance with specific rules applicable to designated commodities, and the issue of physical delivery for overseas traders will be addressed through a bonded delivery system.