The long-awaited stock-index futures is on the horizon, a senior securities regulator said that China is working to unveil it in the first half of the year, in responding the industry calls to introduce risk-hedging tools.

China's State Council has arranged a time table for the launch of the pilot stock futures. The inauguration will be within the first half of the year, said Fan Fuchun, vice chairman at the China Securities Regulatory Commission. He also said they are now studying proposals including one to allow mutual funds invest in index futures.

Several foreign financial giants are reportedly lobbying Chinese regulators to let them join the first batch of investors to trade the index futures.

Stock-index futures are contracts that track equity gauges, allowing speculators to profit from an index's fall or enabling investors to hedge against other investments risks.

The capital market has been keen to develop financial futures for years. It is also a must for further development of the capital, monetary and insurance market.

Chinese authorities have been finalizing preparation since late last year. These futures contracts are set to cover the top 300 Chinese mainland-listed firms.

Market watchers believe the introduction of such derivatives could provide institutions with a much-needed tool to hedge risks, but may also spur speculation and widen volatility.