To become a full clearing member of the proposed futures exchange, a company must have a minimum registered capital of 100 million yuan (US$12.5 million), instead of 200 million yuan as earlier reported.

To conduct broking for clients, securities firms need to either acquire a futures trading subsidiary or register all clients as full members of the proposed futures exchange.

To prepare themselves for trading, talks are now being held between securities firms and futures companies, according to industry insiders.

"The introduction of index futures contracts will considerably increase M&As among securities firms and futures companies," said Dang Jian, president of Shanghai CIFCO Futures Brokerage Co.

Stock market sources expect stock index futures trading could generate a turnover of twice the amount of money traded in stocks. This could amount to as much as 8 trillion yuan (US$1 trillion).

Given that commission fees would be charged at 1/10,000th of the transaction value, trading could produce as much as 800 million yuan (US$100 million) in income for brokers.

The index futures market is initially likely to attract institutional investors such as mutual funds, social security funds, insurance companies and Qualified Foreign Institutional Investors.

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