Goldman Sachs has been cleared to invest in publicly traded yuan-denominated A shares and certain mainland bonds through a ground-breaking scheme to broaden foreign investors' access to China's securities market. The decision by the China Securities Regulatory Commission, announced on Sunday, allows Goldman Sachs to join the first batch of qualified foreign institutional investors (QFIIs) to explore the A-share market, which accounts for most of China's free-floating stock market capitalisation of US$174 billion and was previously reserved for mainland investors. 'We are pleased to have received QFII status and look forward to participating in China's domestic markets,' Goldman Sachs said yesterday. Most of the 1,243 mainland-listed companies have issued A shares. But foreign access to China's stock market was previously confined to the much smaller B-share market. Goldman Sachs said it had appointed HSBC as its QFII custodian bank. It would trade mainland securities through Beijing-based China Galaxy Securities, formed from the securities operations spun off from the trust subsidiaries of China's big four state-owned commercial banks and the country's largest life insurer, China Life. Although Goldman Sachs declined to give further details, market information suggests the United States-based investment bank will take a cautious approach and apply for an initial investment quota of less than US$150 million. QFII rules first unveiled in November permit approved foreign institutions to invest US$50 million to $800 million each. The Chinese foreign-exchange regulator has granted Swiss bank UBS and Morgan Stanley initial QFII investment quotas of US$300 million each. Japanese brokerage Nomura was awarded a quota of $50 million and Citigroup Global Markets, formerly Salomon Smith Barney, $75 million.