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The government plans to open the futures markets to financial institutions and foreign investors while making it easier for domestic firms to hedge in overseas futures markets, government officials said Sunday.

Trading on domestic futures exchanges is basically restricted to domestic futures brokerages with some limited channels for foreign firms. It is closed to banks, insurance companies and other domestic financial institutions.

"While we need to first focus on controlling risk, we will also step by step open up futures markets to financial institutions,"said Zhou Zhengqing, deputy director of the financial and economic committee of the National People¡¯s Congress.

The government is developing new regulations with an eye to allowing financial institutions active in the stock markets to participate in a planned new financial futures exchange.

Under the new regulations, banks would be able to lend money for futures trading, said Yang Maijun, director general for futures supervision at the China Securities Regulatory Commission.

Currently, 31 domestic metals and agriculture firms are authorized to hedge on overseas futures markets.

Six futures brokers have been approved to set up branches in Hong Kong to trade overseas futures, Yang said.