HSBC becomes the first international custodian bank to facilitate offshore investor trading on the Beijing Stock Exchange

Since the implementation of the new QFI regulations in November 2020, more than 150 new applicants have obtained qualifications from the Chinese regulator.

By Jonathan Watkins

HSBC has successfully facilitated a transaction on the Beijing Stock Exchange (BSE) placed by an offshore investor via the Qualified Foreign Investor (QFI) scheme, making it the first international custodian to do so. 

The trade was placed by Samsung Securities, a top-tier broker-dealer in Korea, which has been actively investing in China.   

BSE commenced trading on 15 November 2021, marking a key step forward in China’s efforts to spur innovation and to improve capital financing for small and medium-sized enterprises (SMEs). It is the third stock exchange in the mainland, in addition to two existing bourses in Shanghai and Shenzhen.  

As of early December, 663 offshore institutions have obtained QFI licences, according to the China Securities Regulatory Commission (CSRC). Since the new QFI regulations came into effect in November 2020, more than 150 new applicants have obtained QFI qualifications for China market access from the CSRC.  

 “This first trade emphasises our commitment to be the go-to bank for QFIs in China,” said Suvir Loomba, global head of direct custody & clearing at HSBC. “Our swift response to BSE’s establishment allows our clients to access the new stock exchange in China once they wish to. 

“Built as a primary platform for direct financing of innovative SMEs, the BSE since its launch has attracted the close attention of offshore investors for more diversified RMB asset allocation. We expect more foreign investors to access BSE to position in high-quality and innovation-oriented SMEs in boosting strategic emerging and high-tech industries.”