Two years ago Ceres Ltd signed a contract to aid Huishang
Futures in their efforts to internationalize. Apart of that process was to
educate them on the differences between the Chinese financial system and the
American financial system in addition to classroom education we also brought
them to Chicago to learn directly from some of the amazing firms in the futures
industry as well as to find potential business partners.
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| David Nealis brings Huishang Futures to meet Tim Foley at Advantage Futures |
At the heart of the futures industry are the FCMs, to over
simplify it they are the clearing firms of futures trades, but they often do
much more than this. At the bottom of this page we have put a definition of a
FCM. It was important to bring Huishang Futures to meet and learn from USA FCMS,
not only because it’s Huishang’s goal to become a US FCM and they should fully
understand how different the Chinese and USA systems are.
One of the many examples is a US FCM is a private firm
which in addition to many services also clears the trades but in China this is
a centralized government owned clearing firm and also all of the relevant
brokerage firms are owned by the Chinese
government in one form or another.
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| Ceres Ltd brings Huishang Futures to meet Wedbush in Chicago |
Another very important difference is in the USA the FCMs
are responsible for risk management, but in China there are additional layers
between the brokerage firm and the exchanges for example there is centralized
government owned clearing organization as well as a national Chinese risk organization.
The US firms do not have this additional safety net so rigorous risk and
compliance are vital to its operations.
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| David Nealis brings Huishang Futures to Dorman Trading |
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| Ceres ltd brings Huishang Futures to meet ED&F Man in Chicago |
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| David Nealis brings Huishang Futures to meet Phillip Capital in Chicago |
An FCM is
a Futures Commission Merchant. An FCM is an individual or
organization that solicits and/or accepts orders to buy or sell futures
contracts, options on futures contracts, retail foreign exchange contracts or
swaps and accepts money or other assets from customers to support such orders.
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| Mr Dorman did an amazing job of explaining the US futures industry and its history to Huishang Futures. |
* we introduced Huishang to several other FCMs that aren't pictured.
