China’s capital market will open wider to foreign investors in 2016 and domestic brokerages will expand business overseas, the country’s securities watchdog said on Jan 17.
China will gradually increase the quota for Qualified Foreign Institutional Investors (QFII) and RMB QFII, said Xiao Gang, head of China Securities Regulatory Commission, at a national conference on securities market regulation.
QFII and RQFII are designed for foreign investors to trade securities in China’s largely isolated capital market.
China will work for A share’s inclusion into global stock indices, in a bid to make the performance of domestic market more of an international metric.
The country will encourage sovereign wealth funds, foreign pension funds and passive ETFs to increase investment in China, according to Xiao.
In 2016, China will initiate Shenzhen-Hong Kong Stock Connect, improve Shanghai-Hong Kong Stock Connect and study the feasibility of Shanghai-London Stock Connect.
The country will also attract overseas institutional investors to the domestic bond market through QFII, RQFII and Shanghai-Hong Kong Stock Connect.
Hong Kong- and Macao-funded brokerages will be allowed to establish joint ventures on the Chinese mainland.
In addition, the government will support domestic brokerages to open subsidiaries overseas.