Several foreign institutional investors have received approval to be the first to open accounts in China's share price index futures market, the China Financial Futures Exchange confirmed on Friday.

The exchange did not reveal the names of the QFIIs or how many had obtained approval to trade in the index futures market, but insiders at the exchange told the China Daily there were fewer than 10.

Zhou Danping, product manager and analyst with Xinhu Futures Co Ltd, applauded the move.

"Opening the market will help foreign investors hedge risks in complicated portfolios, and in the long run add liquidity to China's index futures market," he said.

China's capital market regulators, including the China Securities Regulatory Commission, the People's Bank of China and the State Administration of Foreign Exchange, have introduced detailed policies over the past two years for QFIIs entering the index futures market.

"The move will help improve the structure of investors, and will bring China's index futures market closer to the global market," Zhou said.

In the long run, QFIIs will bring more liquidity to the futures market and stock market as China's policy makers continue to open the country's capital market to the world, Zhou said.

Under current regulations and quota limits for trading, QFIIs are approved only to take part in hedging and cannot speculate when trading.

"Entering China's index futures market will help QFII players design more derivatives," said Zhang Ligang, a Shanghai-based investment consultant. "The move will also help prevent a unilateral market, which may increase trading volume of stocks," Zhang said.

Zhou said the effect of QFIIs entering the share price index futures market may not be noticed in the short term with the limited volume of capital flowing into the market due to regulations.

"Investors do not need to worry that QFIIs' involvement will bring significant fluctuation to the futures market in the short term," Zhou said.

China has 124,000 index futures accounts with some 90 percent having trading records, according to the exchange's statistics by mid-December.

Trading activities in the market is reasonable, stable, and mature under strengthened regulations, according to the exchange.

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