By Dai Qi
More foreigners are expected to have access to A-shares according to an announcement released by China's securities regulator on Sunday.
The expansion of coverage includes foreigners who work in China, and in A-share listed companies but reside overseas and participate in equity incentive plans.
Previously, three categories of foreign investors were allowed to open a securities account on the A-Share markets.
Foreigners with a permanent residence identity card may open an individual A-Share account.
If a foreigner has established a foreign-invested joint stock limited company in accordance with the law, which is listed on the A-Shares market, he or she may open an A-Share securities account to hold the shares of a company.
Foreign employees working in China in the A-share listed companies may hold the shares of that company in the A-share securities account if they participate in the equity incentive scheme of the company.
Li Daxiao, chief economist of Yingda Securities, said that the move signaled a wider opening-up of the A-share market and provided an essential channel for qualified foreigners to invest.
It is worth mentioning that the domestic securities regulatory authorities of recognized individual foreign investors involved in the expansion this time must have established a regulatory cooperation mechanism with the China Securities Regulatory Commission (CSRC).
Currently, the CSRC has already signed 68 memorandums of understanding on bilateral regulatory cooperation with 62 countries and regions, including the United States, the United Kingdom, Germany, France, Japan, South Korea, Russia and Singapore.
Although the number of foreigners in compliance with the above provisions is small (about several hundreds of thousands), most of them are the management personnel of A-share listed companies and belong to a high-income, high-net-worth group of people.
The announcement of the CSRC said new regulation drafts on the change were open to receiving public opinions before putting them into effect.
