Capital market opening-up to see renewed impetus

The COVID-19 epidemic has not deterred the further opening up of the Chinese capital market, but rather spurred the same, as the central government has resolved to advance reform and development via further opening-up, a top regulatory official said on Thursday.

Speaking at the 12th Lujiazui Forum in Shanghai, Yi Huiman, chairman of the China Securities Regulatory Commission, said the registration-based initial public offering mechanism on the ChiNext board of the Shenzhen Stock Exchange, which started on Monday, was a good example of the opening-up efforts.

Yi said that openness is the fundamental feature of the modern economic structure and a mature financial market. The CSRC will advance the two-way opening up of the Chinese capital market, he said.

To be specific, the Shanghai-Hong Kong stock connect mechanism will be further optimized, he said. The investment targets under the stock connect programs between Shanghai, Shenzhen and Hong Kong will be expanded further. The businesses under the Shanghai-London stock connect program will be completed. Connectivity programs for exchange traded funds between China and overseas markets can be experimented within a wider range, said Yi.

"Investors from different countries and regions are welcome to invest and participate in the Chinese market more extensively and deeply. Therefore, a win-win situation will be created and the world economy and finance can better integrate, which will translate into sustained development," he said.

The limit on foreign ownership in securities, fund and futures firms has been removed since April 1, which would not otherwise have been lifted till 2021, he said. Industry giants BlackRock Financial Management and Neuberger Berman Investment Advisers LLC became the first two foreign financial service providers to apply for mutual fund qualification in China on the first day when the new policy took effect.

Credit Suisse Founder Securities Ltd got the CSRC approval for an ownership change on April 20, following which the number of foreign-controlled securities firms in China rose to six.

The CSRC approved on Thursday the ownership change plan of JPMorgan Futures Company Ltd, making it the first wholly foreign-owned futures company in China.

On March 20, five foreign financial institutions held a joint online opening ceremony in Shanghai, among which were industry big names JPMorgan Securities (China) Co Ltd and Invesco Ruihe (Shanghai) Private Equity Investment Management Co Ltd.

Guo Shuqing, Party secretary of the People's Bank of China, said at the forum that Chinese and foreign financial institutions must work together on product design, equity investment, corporate governance and talent training, to facilitate the further opening-up of the Chinese capital market.

The internationalization of renminbi should also be advanced steadily, expanding the currency's functions of denomination, settlement, trading and reserves, said Guo. Financial opening-up at the regional level will also be supported, especially in the China (Shanghai) Pilot Free Trade Zone, he said.