Shanghai's Gold Exchange is pressing Beijing to allow foreign banks to become members, in an effort to make its fast-growing business more international and develop a greater range of financial products.
Scotiabank, Commerzbank and Standard Bank of South Africa are among several foreign institutions that have applied to the People's Bank of China to join the 128-member exchange.
'We cannot operate independently of the world market and must work closely with it,' an exchange spokesman told the South China Morning Post at the weekend, adding that the exchange hoped approvals would be secured as soon as possible.
Foreign bankers already serve as advisers to the exchange and see the opportunities there as comparable to those in Shanghai's foreign exchange market.
In the first six months of this year, exchange turnover reached 430.6 tonnes, an increase of 49.1 per cent over the same period last year. Trading rose 59 per cent to 49.4 billion yuan.
Since the end of last year, three of China's Big Four state banks have been allowed to invest on the exchange. Individuals were allowed to open exchange accounts in July.
Trading, however, is restricted to the spot market and closed to foreign investors. The exchange wants to change this and also develop gold-linked financial products to tap into China's billions of yuan of individual and corporate savings.