The week in review: Chinese securities regulator vows further opening up, Hong Kong protesters return, mainland bourses push Reit launch
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The week in review: Chinese securities regulator vows further opening up, Hong Kong protesters return, mainland bourses push Reit launch

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In this round-up, the China Securities Regulatory Commission lays out plans to attract more foreign investors, the Hong Kong police arrests 270 demonstrators for unlawful assembly, and the Shanghai and Shenzhen stock exchanges publish complementary rules for infrastructure real estate investment trusts.

The CSRC will expand the scope of the Stock Connect programme by adding more eligible stocks and allowing foreign investors to trade commodities futures contracts, said Fang Xinghai, vice chairman of the regulator, during the 2020 China International Finance Annual Forum on Sunday.

Fang also revealed that offshore investors hold Rmb2.01tr ($294bn) of stocks in circulation through the Stock Connect scheme. Adding their holdings through other access channels, foreign investors own just 4.69% of Chinese stocks in circulation. In comparison, international investors own roughly 30% of Japanese and South Korean stocks, Fang added.

As a result, the CSRC is planning to expand the investment scope of Stock Connect as well as improve the ETF Connect, Fang said.

It will announce revised rules for the Qualified Foreign Institutional Investor (QFII) scheme and renminbi QFII soon. Additionally, the regulator will also strengthen communication and collaboration with foreign market regulators over different countries’ accounting regulations.

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Hong Kong protesters returned to the streets on Sunday, the day when the legislative election was initially scheduled to take place. It has been postponed due to Covid-19.

Police arrested 270 people for unlawful assembly, according to a Facebook post from the police’s official account. Another 19 people were arrested for charges including obstructing and assaulting police.

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The China Banking and Insurance Regulatory Commission fined five financial institutions a total of Rmb320m in recent days, according to a Friday statement.

China Huarong Asset Management, China Minsheng Bank, Huaxia Bank, Guangfa Bank and Zheshang Bank were those fined. They were mainly penalised for allegedly providing financing for unqualified real estate projects, illegally selling wealth management products and offering credit loans to related parties.  

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The People’s Bank of China injected Rmb100bn into the interbank market through seven-day reverse repurchase agreements on Monday, leaving the interest rate unchanged at 2.2%.

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The stock exchanges in Shanghai and Shenzhen issued complementary rules for infrastructure Reits last Friday. Their rules spanned price discovery schedules, retail investor participation and information disclosure after listing.  

The CSRC and the National Development and Reform Commission first launched public Reit rules in early May.

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CK Asset Holdings, the flagship business of Hong Kong tycoon Li Ka-shing, is planning to dispose of two properties in Beijing and Shanghai worth Rmb50bn, Chinese local media Caixin reported, citing multiple sources.

Sunac China Holdings, a Tianjin-based property developer, is interested in taking over the properties.

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Yan Qingmin, vice chairman of the CSRC, said the regulator will speed up finalising regulations around ordering companies to buy back their issued shares if they have been found lying in their IPO prospectus. The draft rule was first released in late August.

Additionally, the CSRC is mulling setting up a fund specifically to protect investors, Yan said during a Friday industry forum.

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Gao Feng, a spokesperson at the Chinese Ministry of Commerce, said last Thursday that the newly updated catalogue of technologies prohibited from export does not have anything about the upcoming TikTok sale.

The Ministry of Commerce and the Ministry of Science and Technology adjusted the list of technologies subject to export controls on August 31 — just weeks ahead of the deadline set by US president Donald Trump for TikTok to sell its US businesses.

Among the newly-added restricted technologies are “personalised information push technologies based on data analysis” and “artificial intelligence interactive interfaces”. Both of these are used in TikTok parent ByteDance’s feed recommendation system.

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