SHANGHAI, Jan. 27 /PRNewswire/ -- Since the great opening in the 1970s, China has been on a path of social, economic and political reform that has made it the second largest economy in the world. Integral to this growth has been the Chinese capital markets, which have developed rapidly in the past few years with tremendous growth in sophistication driven by an increasing openness and access to the latest in financial technology.
However, the Chinese government is taking a very pragmatic and measured approach to changing the regulations related to trading both into and out from the Chinese markets. "Although we are seeing the quotas for Qualified Domestic Institutional Investors (QDII) and Qualified Foreign Institutional Investors (QFII) programs increasing, the venues in which they are allowed to invest are still limited," said Alexander Fu, a Kapronasia analyst and co-author of the report. "For example, alternative trading venues such as dark pools, which are common in the west, are forbidden in mainland China. Furthermore, we found in our research that most executives don't see regulations on alternative venues changing in the near future."
Although regulations restrict investment in China, they haven't restricted the global ambitions of China's exchanges. "The Shanghai Stock Exchange (SSE) is the largest market by trading value in Asia and it surpasses even large global markets such as the LSE," said Zennon Kapron, Kapronasia's Managing Director. "The SSE has global ambitions and part of this is the recent implementation of a new trading system and the opening of the market to foreign listings, which is expected this year."
Based on interviews with senior level executives at some of the top buy and sell-side institutions, the "Taking Stock 2010: The Changing Face of Order Routing and Equity Trading in China" report is the first of its kind in the market and offers invaluable and vital insight into order routing and Direct Market Access (DMA) in China.
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