Ftse Group (Ftse) has launched the Ftse Global R/QFII Index Series, a set of benchmarks that will provide market participants with the ability to include China A-shares in global indices at a time of their choosing.
The new indices can either be weighted by the aggregate approved QFII/RQFII quota, weighted by free float/foreign ownership restrictions; or have no quota restriction.
“The launch of the Ftse Global R/QFII Index Series will provide customers with the flexibility to decide when and how to include China A-shares in their global benchmarks, without making it a requirement,” said Mark Makepeace, CEO of Ftse Group.
“We feel that this is an important step in an evolving process and Ftse will continue to monitor developments in the China market infrastructure, in line with our transparent Country Classification process.”
As China continues to take steps to open its markets to international investors there has been increasing debate around the inclusion of A-shares in global benchmarks.
China A-shares are not currently included in Ftse’s standard global benchmarks. The region has been on the Watch List since 2005 and Ftse’s Country Classification Committee has been able to monitor the gradual and positive market developments with respect to a number of key areas of the Quality of Markets Matrix.
The Ftse Group said that further progress would be required in areas such as market accessibility and quota allocation, regulatory oversight, and capital repatriation.