BEIJING, Mar. 10(Xinhuanet)-- Union Bank of Switzerland(UBS) AG has won a license to trade financial derivatives in China, joining rivals including Citigroup Inc. as the market opens further to foreigners, according to a newspaper report.

The license allowed the Swiss bank to trade derivatives on interest rates and currency, the China Securities Journal said Wednesday.

Foreign players are now shut out of much of the domestic bank sector but will win nearly full access to its US$1.5 trillion in personal savings by the end of 2006.

The government had allowed trading in financial derivatives from March 2004, but had given licenses since 2003 to only domestic lenders such as the Bank of China(BOC) and the Industrial and Commercial Bank of China(ICBC).

Yet the government sees a growing need for hedging tools as it forges closer links with the global economy and moves toward more liberal interest rate and currency regimes. Foreign expertise can help.

Other foreign banks previously authorized to trade financial derivatives include Standard Chartered, Bank of Tokyo-Mitsubishi¢w an arm of Mitsubishi Tokyo Financial Group¢w and Mizuho Financial Group, Japan's top financial services player, according to industry sources.

More than 20 international banks have applied for similar licenses, Citigroup said in June.

These included Bank of America Corp., France's Societe Generale and BNP Paribas, and Hong Kong's Hang Seng Bank, which is controlled by Britain¡¦s HSBC Holdings, said industry sources.

(Source: Shenzhen Daily/Agencies)