Latest crackdown in China ICYMI – brokers must limit their exposure to “snowball” derivatives

China is taking steps to regulate the derivatives market, targeting “snowball” derivatives.

• Authorities have asked some of the largest brokerages to halt any increases in their net exposure to over-the-counter derivatives involving domestic A-shares, including snowball products.
• Snowballs have seen a resurgence of interest.
• Although the restrictions are considered temporary, no indication has been given as to an end date for the restrictions.