The New Nation - Internet Edition

AFP, Beijing

US investment bank JPMorgan Chase and Co has received the green light from Chinese authorities to set up a futures trading joint venture, state media said on Thursday.

JPMorgan Chase's local partner will be Zhongshan Futures Co, a futures brokerage company with a registered capital of 30 million yuan (four million dollars), the China Daily reported.

The joint venture will provide trading and clearing brokerage services in both commodity futures and, when they become available, financial futures, according to the paper.

"By learning from JPMorgan's rich experience in the global market, we can avoid the long and tedious learning curve in financial futures trading," said Jiang Xuehong, Zhongshan's general manager.

China has been moving very slowly on the introduction of futures, fearing their potential to increase volatility in the markets.

But China's securities regulator said earlier this month that a long- awaited plan to launch stock index futures is "basically ready".

Futures contracts allow investors to buy or sell stocks or other assets at a fixed date in the future and are traditionally seen as a useful instrument to hedge risks.