China has shown a strong trend towards the liberalization of financial services, both as to what (range of permitted services) and who (increasing market access for non-Chinese institutions). Many foreign institutions consider a presence in mainland China a strategic necessity, leading in some cases to a scramble-for-China mentality. It is no coincidence that the Chinese regulatory bodies are becoming increasingly sophisticated and that more attention is being given to enforcement. All this adds up to a rapidly increasing exposure to the Chinese financial services regulatory regime for non-Chinese institutions.

Securities

There are two stock exchanges in mainland China: one in Shanghai and the other in Shenzhen. Chinese listed companies can issue different categories of shares, the most important of which are:

A shares, which are renminbi-denominated shares listed on the Shanghai or Shenzhen market. There are around 1,400 A-share companies. Only PRC citizens resident in mainland China may trade in...