China is clamping down on trading in some equity derivatives to reduce speculation amid a growing market crisis.
The country’s China Financial Futures Exchange has said it will restrict trading in stock index futures after the contracts slumped by their 10% daily limit on two consecutive days.
Measures include raising margin requirements for index futures, restricting open positions and transaction fees.
Chinese markets have seen confidence evaporate in recent weeks amid concerns the world’s second largest economy is slowing down. The Shanghai compositive index has reached its lowest level in eight months after seeing daily falls of up to 8%. Despite a rally earlier today, shares closed down 1.3%.
Curbing derivatives trading is the latest measure by Chinese officials to try and control the crisis, after a shock devaluation of the RMB currency and suggestions interest rates could be cut.