Standard Chartered Bank (China) has taken on the role of the custodian in assisting a large overseas institutional investor to complete a stock borrowing deal in the A-share market.
This includes the main board, growth enterprise market and the Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market).
Standard Chartered assisted with the deal on the first day of the Qualified Foreign Institutional Investors (QFII)/RMB Qualified Foreign Institutional Investors (RQFII) stock borrowing trading in the Shanghai and Shenzhen markets.
This also marks the first stock borrowing deal by QFII in the market, following the release of the “Measures for the Administration of Domestic Securities and Futures Investment by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors” by regulators.
The participation of QFII investors in stock borrowing helps expand the scale of the markets, improve the trading engagement, refine the long-short balance mechanism, and further enhance the internationalisation of China’s capital market, explained Standard Chartered.
Rick Hu, head of securities services at Standard Chartered China, said: “The latest regulatory relaxations offer more investment instruments to QFII, among which the stock borrowing and lending businesses have always been the most attractive ones that are frequently inquired by many overseas institutional investors.”
Hu continued: “Standard Chartered China has been actively cooperating with the depositories and securities companies from the very beginning, studying the trading and settlement mechanism, designing the processes and testing the systems, and 1 Based on statistics from relevant institutions PUBLIC accordingly preparing the interested clients with both knowledge and setup.”
“We are pleased to have played a key role in our client’s successful completion of the first stock borrowing deal, and will continue to introduce and serve overseas institutional investors to contribute to the interconnection of domestic and foreign capital markets,” added Hu.
Elsewhere, HSBC has facilitated short selling transactions by an offshore investor via the QFII scheme.
