SIFMA today testified before the House Financial Services Committee’s Subcommittee on International Monetary Policy and Trade to discuss market access in China and progress made in the Strategic & Economic Dialogue (S&ED).
“SIFMA has long supported more open, fair and transparent markets, and liberalization of the national treatment of financial services in U.S. multilateral and bilateral trade forums,” said David Strongin, managing director at SIFMA. “In the global economy, openness and fairness are essential to ensuring that markets operate efficiently so that capital can move seamlessly across borders and investors can easily and quickly buy and sell securities anywhere, while businesses can access capital at the lowest cost.”
In his testimony, Strongin identified five key and interconnected industry priorities to help ensure a more level playing field for SIFMA’s members currently in China:
- Permit 100 percent ownership and right to establish in corporate form of choice;
- Allow same scope of business;
- Further develop QFII/QDII programs;
- Improve bond market depth/liquidity/efficiency; and
- Promote regulatory transparency
Strongin also addressed the recent commitments and results stemming from the 4th S&ED held in Beijing. Strongin noted that the S&ED plays a key role in advancing the U.S.-China economic relationship and provides the best forum for constructive, high-level engagement on priority issues, including financial services market access.
Strongin noted that this year’s S&ED yielded important commitments from China to allow SIFMA member companies an increased opportunity to conduct business in China on a more level playing field. Some of those outcomes include:
- Increased equity caps from 33 percent to 49 percent for securities joint ventures;
- Reduction of the “seasoning period” to 2 years;
- Increased QFII quotas; and
- Commitment to continue Bilateral Investment Treaty discussions
Lastly, Strongin noted that more work needs to be done to ensure U.S. financial services firms are able to operate on a level playing field in China. Strongin put forward two recommendations to the Subcommittee to help ensure these commitments are met:
- An annual report to Congress demonstrating China’s implementation of commitments agreed to at each S&ED; and
- Increasing the frequency of the economic portion of the dialogue to twice per year as was done during the original Strategic Economic Dialogue.
The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.