Opinion | LME's hopes of breaking into China market fading fast
Beijing has made it clear that it intends to exercise control over futures trading in a five-point policy pronouncement for the Shanghai FTZ
It's time to wake up from the dream that the Hong Kong stock exchange and its new pet, the London Metal Exchange (LME), might secure a big slice of the mainland's futures trading pie.
The mainland wants to keep that pie to itself, as its top securities watchdog made clear in a five-point policy pronouncement for the Shanghai Free Trade Zone last week.
From here onwards, China will gradually open up its futures market
Hopes that the LME might break into the mainland market have been running high ever since it was acquired by the Hong Kong stock exchange late last year, thanks to the myth that the expensive deal would not have been done without Beijing's blessing.
The dream looked very real in the past few months, when some media reported that foreign commodities exchanges would be allowed to operate warehouses in the Shanghai zone, something the China Securities Regulatory Commission (CSRC) has banned since 2008.
It did not happen. The State Council announcement on the zone last Friday made no reference to the warehouse plan.
It was removed from the announcement because of strong ministerial opposition, in particular from the CSRC, according to sources.