Beijing is further opening the financial sector with the launch of new measures that will permit foreign nationals in China to open A share accounts and reap the benefits of the share incentive programs of listed Chinese companies.
On 15 August the China Securities Regulatory Commission (CSRC) issued new amendments to the “Securities Registration and Settlement Administrative Measures” (证券登记结算管理办法) and the “Listed Company Share Incentive Administrative Measures” (上市公司股权激励管理办法) which are slated to come into effect on 15 September 2018.
The amendments to the Measures will allow foreign natural person investors who are working in China to open A share securities accounts, as well as enable foreign nationals working for Chinese companies to benefit from share incentive plans.
The Settlement Administrative Measures have expanded the investor scope to include “foreigners who satisfy regulations” alongside Chinese citizens, Chinese legal persons and Chinese partnerships.
The Settlement Administrative Measures outlines stipulate specific measures for applications by foreigners to open their own securities accounts subject to the approval of CSRC.
The Incentive Administrative Measures expands the scope of domestic share incentive recipients to include all foreign national employees of listed Chinese companies, in addition to just those who work within China.
Ma Tao (马韬), chief strategic analyst with BOCOM Schroder, said to state-owned media that the new rules will not only help to drive internationalisation of the Chinese A share market, they will also make it easier for foreign professionals to work and start ventures in China, as well as participate more deeply in the Chinese economy.
This will also effectively resolve existing problems with the share incentive plans of listed Chinese companies, which due to current restrictions often necessitate the holding in proxy by other parties of equity stakes allocated to foreign employees.