China A-shares on track for inclusion in global benchmarks

NEW YORK -- Global equity indexes provider MSCI announced Tuesday that it expected to include China A-shares in its global benchmarks after a few important remaining issues related to market accessibility have been resolved.

"The concerns include, but are not limited to, the quota allocation process, capital mobility restrictions and beneficial ownership of investments," said the New York-based provider in a statement, adding that "MSCI and the China Securities Regulatory Commission (CSRC) will form a working group to contribute to the successful resolution of these issues."

"Substantial progress has been made toward the opening of the Chinese equity market to institutional investors," Remy Briand, MSCI Managing Director and Global Head of Research, said in the statement.

Since the 2014 MSCI Annual Market Classification Review, positive market-opening developments in the Chinese capital market include the successful launch of the Shanghai-Hong Kong Stock Connect program ("Stock Connect"), the expansion of RQFII program from four cities to 12 cities and the clarification of the capital gains tax, according to the statement.

"In addition, the imminent launch of the Shenzhen-Hong Kong Stock Connect program and potential further liberalization of the QFII program should further improve the accessibility of the China A-shares market," the statement said.

MSCI said that it may announce the decision to include China A- shares in the MSCI Emerging Markets Index as soon as the issues are resolved. "This may happen outside the regular schedule of its annual Market Classification Review."