Hong Kong brokers have urged Shenzhen's government to allow them to set up joint ventures with mainland counterparts in the Qianhai pilot zone.
"Qianhai is an important project for the country to open up its capital market to the world. Hong Kong brokers, who have traded for international investors for decades, can contribute to it if we are allowed to set up joint ventures with mainland brokers," said Christopher Cheung Wah-fung, lawmaker representing the financial services sector.
In January, Cheung led a delegation of securities professionals to sign an agreement with the Authority of the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone, under which the two sides would propose measures to attract Hong Kong and international financial firms to invest in Qianhai.
Cheung said last month that he represented local brokers in submitting proposals that are now awaiting clearance from the Shenzhen government. Under the proposals, Hong Kong brokers would be allowed to set up joint ventures with mainland counterparts in Qianhai, to trade for mainland and Hong Kong investors in local stock markets.
In view of the existing capital controls, Cheung said, the mainland authorities could grant a quota to restrict the scale of operation of joint ventures.
The next step was to lobby for support from the top authorities in Beijing, he said.
"Chinese leaders have always expressed their wish to internationalise the yuan and to make mainland financial markets more in line with the international world. Qianhai is the right place to carry out such an experiment," Cheung said.
The Qianhai experimental zone was first mooted by the Shenzhen government in 2010 as a testing ground for economic liberalisation, with the target to turn it into an international city.
"Qianhai is equal to the size of five Centrals. Now, with the central government's support, the potential for the area would be huge," Cheung said.
"By way of joint ventures … Hong Kong brokers could import their knowledge about how to run international firms to the mainland brokerages. This is a win-win situation," he added.
In January, Qianhai allowed 15 Hong Kong and international banks to offer a combined two billion yuan (HK$2.46 billion) in loans to companies there.
Meanwhile, Cheung said he would meet the Hong Kong Exchanges and Clearing's executive today to discuss launching futures trading between 5pm and 11pm from next Monday.