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MSCI sees `lot of issues' to solve on China stock inclusion

Bloomberg Published on Thu, May 25, 2017 / 12:10 PM GMT+8

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(May 25): China still has some ways to go to win approval for its mainland stocks to be included in emerging-market indexes, according to the head of the company that compiles the benchmarks.

"There’s still a lot of issues to resolve in a short period of time,” MSCI Chief Executive Officer Henry Fernandez said in an interview on Bloomberg TV. “We’re making a lot of progress on all fronts but it doesn’t mean we’ll get there."

MSCI is about half-way through consulting its clients, with about 100 left to go ahead of the June 20 announcement on the decision, according to Fernandez. This is the fourth attempt at including so-called A-shares. Last time around there were three key issues, the CEO said:

Access to the market through QFII or RQFII. A Qualified Foreign Institutional Investor (QFII) is one that’s been approved by China to buy onshore securities, while an RQFII is an authorized investor using offshore yuan (renminbi) to do the same.
Problems with the suspension of trading in some stocks.
Challenges with Chinese regulators insisting on a pre-approval process for financial products abroad that are linked to indexes including A-shares.