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Thread: Buy the stocks in "Chindia"?

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[quote=MARRIE,301190]As stated above, the Shanghai branch of the PBOC has authority over approval of the SHSE itself, approval of transactions, and regulation of securities dealers.146 Because the original SHSE regulations did not explicitly permit foreign entity participation as brokers, dealers, or underwriters, the 1991 Shanghai B-Share Administrative Measures and the Shanghai B-Share Implementing Rules were promulgated. Under these regulations, trading on the Shanghai exchange is limited to approved Chinese securities houses, although foreign securities firms can be sub-distributors of &shares.l47 Foreign securities firms are allowed to solicit orders for B-shares only, but have to route them through a Chinese member of either the SHSE or the SZSE.148 All B-Share transactions on the Shanghai exchange must be executed through a securities company approved by the local PBOC branch, with significant restrictions on foreign participation.l49

In June 1993, twenty-six SHSE foreign members were invited to apply for memberships on the SHSE. Under the proposed arrangement, foreign securities firms could place a trader on the floor of the exchange but had to clear and settle with a Chinese member with whom they had to share the commission.50 The legal form of the trading enterprise under the proposed arrangement had to be a foreign company.151 The restricted use of the membership plus the RMB 0.6 million application fee, led only eight of the twenty-six invited firms to accept this initial offer.l52 .........

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