Foreigners living and working in China have the first-hand information about the Chinese capital market. This has prompted many to try to invest in the stock market. Previously, strict restrictions were imposed on foreign investors. As of September 15, 2018, the China Securities Regulatory Commission had lifted these with the intention to further open the financial market of Mainland China. Thus, certain foreign investors, such as non-citizens working in the country and those employed by mainland-listed companies can trade A-shares. Of course, some limitations prevail, such as eligible investors must originate from countries whose securities regulators have agreed to partner the China Securities Regulatory Commission (CSRC). These partners include 62 countries and territories as of August 16, 2018 (some of these being the United States, Australia, Singapore, Russia, the United Kingdom, Japan, Malaysia, France, Germany, Brazil and many more).
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Stocks known as A-shares are traded in yuan on the mainland stock exchanges in Shanghai and Shenzhen. Similarly, stocks traded in foreign currencies are known as B-shares. The channel through which foreigners can buy A-shares is called the Qualified Foreign Institutional Investors Programme (QFII) and it provides access to 3560 companies listed on both Shanghai and Shenzhen exchanges.
Would you like to see if you’re eligible for the stock market and how the process works? Keep reading!
Under the new regulations as of September 15, 2018, foreigners matching the following criteria can set up A-share trading accounts:
As mentioned earlier, the eligible foreign investors must originate from one of the 62 countries that have signed the regulatory cooperative agreements with the CSRC. The number or qualified investors is estimated to be several hundred thousand of individuals.
The cooperation can easily be checked online. You or the agencies you entrust can log on to the official website of the China Securities Regulatory Commission here. Under the “Home-International Affairs-Regulatory Cooperation” column, you can find all the necessary info regarding CSRC partnerships. Look for lists of MOUs signed between the CSRC and overseas authorities!
Curious on how to open an A-share account? Continue reading this article to get an answer!
What if you can’t apply in person? Say, you’re a foreign employee of an A-share listed firm and participate in their equity benefit program but work abroad.
Fear not, you can still open an account by providing some additional materials:
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