New rule to boost A shares, cross-border flows

Beijing will soon give residents of Hong Kong, Macau and Taiwan access to the mainland's A shares, injecting new vigour into the lacklustre stock market.

The China Securities Regulatory Commission is expected to unveil in the near future a new rule governing the opening of A-share trading accounts, which will, for the first time, define residents from the three areas as qualified A-share investors if they live on the mainland.

A CSRC press officer told the South China Morning Post yesterday the regulator had officially endorsed the policy change and the rule would take effect shortly.

The regulator would not disclose a clear date for the liberalisation, but an official announcement is expected within weeks.

The change would allow nearly 500,000 mainland-based people from the three areas to buy A shares, although analysts said it would be difficult to predict how much fresh capital they would bring to the market.

A person with knowledge of the policy said the new investors would initially be allowed to use their own currencies to invest in the yuan-denominated equities.

The CSRC has been striving to bolster the mainland equity market since chairman Guo Shuqing took office in late 2011. But his efforts have yet to pay off because of weak buying interest.