HSBC has successfully facilitated a transaction in Beijing Stock Exchange (BSE) placed by an offshore investor via the Qualified Foreign Investor (QFI) scheme, becoming the first international custodian to facilitate a QFI trade in BSE.
The trade was placed by Samsung Securities for its underlying product – Samsung Renminbi Qualified Foreign Institutional Investor (RQFII) Trust. Samsung Securities is a broker dealer in Korea, which has been actively investing in China.
BSE commenced trading on 15 November 2021, marking a key step forward in China’s efforts to improve capital financing for small and medium-sized enterprises (SMEs).
It is the third stock exchange in the mainland, in addition to two existing bourses in Shanghai and Shenzhen.
As of early December, 663 offshore institutions have obtained QFI license according to the China Securities Regulatory Commission (CSRC). From these, HSBC services 248 QFIs as an onshore custodian bank.
Since the implementation of new QFI regulations in November 2020, more than 150 new applicants have obtained QFI qualifications for China market access from the CSRC.
Suvir Loomba, global head of direct custody and clearing at HSBC, says: “This first trade emphasises our commitment to be the go-to bank for QFIs in China. Our swift response to BSE’s establishment allows our clients to access the new stock exchange in China once they wish to.
He adds: “Built as a primary platform for direct financing of innovative SMEs, the BSE since its launch has attracted the close attention of offshore investors for more diversified RMB asset allocation. We expect more foreign investors to access BSE to position in high-quality and innovation-oriented SMEs in boosting strategic emerging and high-tech industries.”
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