Citi China has established clearing and settlement services for the new Beijing Stock Exchange to support trading under the qualified foreign institutional investor (QFII) programme.
The stock exchange is fully owned by the Beijing-based National Equities Exchange and Quotation (NEEQ), an existing platform dealing in over-the-counter trading of smaller companies typically before they list on a stock exchange. It is expected that many of the top-tier companies traded on NEEQ will migrate to the Beijing Stock Exchange.
Plans to create a new bourse in Beijing was first announced by Chinese President Xi Jinping in September 2021. It is now the third stock exchange on the Chinese mainland after the Shanghai Stock Exchange and the Shenzhen Stock Exchange.
The Beijing Stock Exchange will focus on innovation-oriented small and medium-sized enterprises (SMEs) which may have struggled to access financing compared with their larger counterparts. The new exchange aims to provide these SMEs with an increased pool of investor capital to support their growth ambitions.
Citi China says it established the clearing and settlement route with the Beijing branch of China Securities Depository and Clearing Corp. (CSDCC).
Aashish Mishra, Citi’s Asia-Pacific head of custody, notes that the bank was among the first international banks to acquire CSDCC clearing membership and provide custody and clearing services for QFIIs in 2003.
“Our ability now to support settlement and clearing activity for the launch of the Beijing Stock Exchange reiterates our support and confidence in the China market,” adds Citi China chief executive officer Christine Lam.