SIFMA Pleased With China’s Elimination Of Barriers On New Foreign Securities Firms

“We commend American and Chinese officials for engaging in this important dialogue, which will play a key role in advancing the US-China economic relationship,” said Marc Lackritz, SIFMA president and CEO. “Eliminating burdensome barriers to entry is a win-win for the economies of both nations. American financial services firms will be given new opportunities for growth, while at the same time assisting their Chinese counterparts with the development of a modern financial services system.”

“We are particularly pleased the Chinese have taken a critical first step towards this goal by lifting the moratorium imposed on foreign investment in Chinese securities firms,” he added. “In order for the Chinese to fully benefit from American financial services expertise, US firms will need much broader access to Chinese markets. Handicapping American firms with a cap on investment and ownership does nothing but hinder Chinese growth and development.”

As such, SIFMA urged continued dialogue between the US and China in an effort to completely remove foreign ownership caps.

In addition, the meeting resulted in progress on the Qualified Foreign Institutional Investors (QFII) Program. The aggregate investment limit for approved foreign institutional investors to trade yuan-denominated securities listed on Chinese exchanges was raised from $10 billion to $30 billion.

The second meeting of the US-China SED, which ran from May 22-23, reviewed progress on work plans agreed to at the December meeting and continued discussions in areas including policies to address economic imbalances to ensure continued global growth, China’s economic development and further integration into the world trading system, greater openness of markets, cooperation on energy security and the environment, and innovation. The dialogue was launched by Presidents Bush and Hu in September 2006.