The new Industry Forum edition addresses two important indusry topics:

Foreign Portfolio Investors in Mainland China

Qualified Foreign Institutional Investors (QFII) are poised to gain greater access to China’s “A” share market. The current state of this market and the greatest challenges facing the foreign investor and global custodian are discussed.

Our discussion was framed by a number of central questions asked of the global custodians:

• What are your expectations for the level of foreign investment in mainland China, more specifically QFII Class “A” shares?
• For the QFII Class “A” market, how would you rate the challenges?
• Will the Class “B” share market be around for awhile?
• As a global custodian, what are you doing to position yourself as a service provider in mainland China? Briefly describe current/planned services offered in mainland China.
• Is QDII (Qualified Domestic Institutional Investor) business — i.e. China domestic investors in foreign stocks — the preferred way for global custodians to establish a presence in mainland China?
• What should foreign investors do to better prepare for increased portfolio investments in China? Are you helping in any way?
• Is any one trading venue best positioned for the greatest growth – Shanghai Stock Exchange or Shenzhen Stock Exchange?

The responses to these questions form the basis for an informed and current understanding of the very complex challenges facing foreign investors going directly in mainland China. The global custodians participating in this survey are the most well informed securities professional in the industry. Their insights and commentary provide an exceptional understanding of the nuances of this emerging market.

Emerging Markets