China has moved one stage nearer to allowing foreign investors to trade shares denominated in yuan. The authorities have awarded licences to nine banks to handle custodial business for foreign institutions investing in domestic Chinese stocks, under the proposed Qualified Foreign Institutional Investors (QFII) scheme. The banks comprise six from China, including the big four plus Bank of Communications and China Merchants Bank, and three foreign banks – HSBC, Citibank and Standard Chartered. The process of screening applicants for QFII status will now begin and institutions approved would have to choose one of the named banks to take custody of their money.
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