STANDARD Chartered Securities managing director Eugene Yang believes that opening the Shanghai Securities Exchange to direct trade by foreign brokers through as many as 10 special seats will add liquidity to the B shares market. However, local brokers fear the move is premature and more likely to undermine their own trade in B shares because foreign brokers will make their own deals instead of using local brokers as intermediaries. Standard Chartered has been granted one of the special seats, giving the firm its own booth on the trading floor and direct access to its own traders. Other brokers granted special seats are Jardine Fleming and Baring Brothers. ''International participation which will lead to more competition should be seen in a positive light. Local brokers would realise that the move means benefits to everybody at the end of the day,'' Mr Yang said. Mr Yang said it was difficult at this stage to say how much more business the new status would bring to the brokerage. Over the past few months, a number of foreign brokerages have been talking to officials at both the Shenzhen and Shanghai exchanges about seats on their trading floors. ''The situation shows that the Shanghai exchange is more progressive and innovative than its southern counterpart in bids to acquire international trading practices,'' said a broker at a Hongkong-based brokerage. The mainland authorities should not allow protectionism to hinder the development of Chinese stock markets, he said. Since the two mainland stock exchanges started trading, authorised foreign and local agents have played complementary roles. However, there have been complaints from overseas investors about the low efficiency of some of the local agents in executing orders. Holders of the special seats will have virtually the same rights as full members at the Shanghai exchange and are expected to have priority in obtaining full membership once Beijing grants approval. Meanwhile, Standard Chartered Securities, which has been a major player in the primary and secondary B share markets, plans to open offices in Shanghai and Shenzhen. Apart from hiring its own local dealers, Mr Yang said there was also a need to enlarge the brokerage's mainland operations.