China is opening its market to foreign investors at a significant pace. It is increasingly likely that in less than five years China A-shares will become eligible for inclusion in FTSE’s global indices. To facilitate this growth….
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in access, FTSE is launching a new set of indices called the FTSE Global R/QFII Index Series on 16 June 2014. The new index series will give market participants a range of index choices to help them prepare for the inclusion of China A-shares in global benchmarks.
There will be no change to the FTSE Global Equity Index Series. Based on the country classification meeting in September 2013, China A-shares are not yet eligible for FTSE’s standard global benchmarks. For inclusion further progress is required as part of FTSE’s country classification process in areas such as market accessibility and quota allocation, regulatory oversight and capital repatriation. FTSE will continue to consult and engage with market participants and the Chinese authorities to monitor developments and gauge progress in these key areas. A formal review of the status and eligibility of A-shares will be held every September. The next review is due in September 2014.
The FTSE Global R/QFII Index Series will provide market participants with following benchmark options:
• Global benchmarks with China A-shares included and weighted by the aggregate approved quota (including QFII/RQFII)
• Global benchmarks with China A-shares included and weighted by free float and foreign ownership-adjusted market value as if no quota restriction
• Customised indices based on an investor’s own QFII/RQFII allocation
Market participants who do not wish to have A-shares in their global benchmarks can continue to use the FTSE Global Equity Index Series. The index series histories will be available from 16 June 2014.
Source: ETFWorld.com
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