According to news from the China Securities Regulatory Commission (CSRC), China is now willing to allow foreign bourses to establish Representative Offices in China. Not just limited to Indian exchanges, a global scramble is expected as some of the worlds biggest exchanges are expected to want a piece of the action, as China antipates some US$100 million being placed by Chinese companies in overseas markets.
There are qualifying procedures. Other regulatory regimes are expected to sign an MOU with the CSRC which includes the sharing of cross-border investment data and transactions, and that such Representative Office must be from respected exchanges “with sound operational and financial conditions existing for ten years or more.”
Likewise, the Chief Representatives of such offices must have a “minimum of three years experience in handling matters related to China within the past five years” and “possess knowledge of China’s financial laws and regulations,” although exactly how this is deemed a qualification is not clear. Tipsters from your local barfly would appear to enable him to fall into the melting pot for qualified personnel.
A typical lack of clarification and implementing rules from China’s regulatory bodies aside, it does mean that India’s Stock Exchanges are poised to open up Representation in China. Indeed, the Securities and Exchange Board of India has signed off on a CSRC MOU, and the National Stock Exchange and main Bombay Stock Exchange, as well as the smaller bourses in Delhi and Kolkota are expected to apply.
Such offices are to be restricted to marketing, and only to focus their promotional activities to business enterprises and not Chinese individuals. Public advertising will also be banned.