(Yicai Global) Nov. 23 -- China’s cabinet has approved a futures exchange to be set up in Guangzhou, the country’s fifth such trading venue, the Securities Times reported, adding that it will likely to open for business this year.

The Guangzhou Futures Exchange will help the Greater Bay Area have more sway over financial and commodities pricing as well as enhance the strategic security of staple commodities in Guangdong and the whole country, the city’s Deputy Mayor Chen Zhiying said at the International Finance Forum on Nov. 21, according to the report.

The new bourse will also help to draw in financial institutions such as banks, brokerages, fund and futures companies along with corporate headquarters, boosting the ability of Guangzhou’s finance sector to serve the real economy, Chen said.

The GFE will adopt a corporate system and will be jointly set up by the country’s existing futures exchanges – the Shanghai Futures Exchange, the Zhengzhou Commodity Exchange, the Dalian Commodity Exchange, and the China Financial Futures Exchange, Yicai Global learned.

The new exchange is expected to become compatible with internationally accepted practices in variety and institutional innovation, relying on its policy and geographical advantages to promote its internationalization, the Securities Times said, citing a market participant.

Editor: Peter Thomas