Beijing, Feb 26 (Xinhua) As the Chinese government is considering easing control over foreign investment in the futures sector, investors are reportedly rushing into talks with potential Chinese partners on possible merger and acquisition.

The industrial guiding catalogue for foreign investment, currently being revised by the commerce ministry, is likely to open the futures markets on certain conditions in certain areas, according to China Business Newspaper.

A draft revision of regulations on futures trading recently approved by the country's State council suggests that foreign investors may be allowed to acquire Chinese futures companies.

According to ministry sources, some foreign investment has actually penetrated into the futures sector by holding stocks in Chinese futures companies, although the country bars foreign capital from the futures sector.

The Hong Kong-based securities brokerage CLSA is said to be in negotiation with Xiangcai Qinian Futures, founded in 2004 with a registered capital of 30 million yuan ($3.9 million), to inject 20 million yuan for the company's stakes,

Without revealing the specific list of shareholding, the newspaper said that Xiangcai Securities, the cash-strapped holding company of Xiangcai Qinian Futures, was forced to sell the assets, but hoped to maintain its share-controlling status.

If CLSA succeeds in its bid, Xiangcai Qinian would meet the minimum capital requirement of 50 million yuan of registered capital for a clearing member of China Financial Futures Exchange (CFFE).

Goldman Sachs Gaohua Securities Co., Ltd is reported to be seeking potential partners among Chinese futures companies as well, so that its clients can invest in stock index futures in days to come.

Morgan Stanley, which once held a major stake in China International Capital Corporation (CICC), was also encouraging CICC to buy into futures companies.

Foreign investors could only make a detour to merge and acquire mainland futures companies via its Hong Kong branch, as in the trial case of Galaxy Futures jointly established by the Hong Kong branch of ABN AMRO Bank and China Galaxy Securities Co.

However, foreign investors' entry into China's futures market by buying into Chinese futures companies remains uncertain till further policies comes up, the report said but notes optimism of financial analysts that stock index futures as China's first financial derivative product may be just round the corner.