Newsletter
RULES FOR INSURERS' DERIVATIVES TRADING AMENDED
Article 8 of the Directions for Insurance Enter-prises' Trading in Derivatives was amended on 25 May 2007, to increase the limits on the value of trading in derivatives conducted by insurance enterprises for the purposes of risk hedging or improving the efficiency of their investments. With respect to the total contract value of do-mestic or overseas derivatives held by an insurer for the purpose of improving investment effi-ciency, the accumulating limits is amended from "40% of the owner's equity of the insurance en-terprise" to "5% of the insurance enterprise's capital", while the limit for holdings of overseas derivatives is amended from "20% of the owner's equity of the insurance enterprise" to "3% of the insurance enterprise's capital".
These changes will greatly increase the insurers' ability to engage in derivatives trading.