According to reports out of Hong Kong the city’s Securities and Futures Commission has granted a license to the London Stock Exchange therefore allowing Hong Kong based financial businesses to become members of the exchange.
Speaking on the sidelines of a local event Alexander Justham the chief executive of the London exchange said, "The SFC license is an important move for the London Stock Exchange to further develop our business related to Hong Kong and Chinese companies."
The bourse has also signed a memorandum of understanding with four Chinese financial companies to encourage more Chinese firms to list in London. The four companies are Agricultural Bank of China, Bank of China, China Construction Bank, and Haitong Securities.
The agreement also comes on the day London Stock Exchange Group hosts its second annual Greater China Capital Markets conference. Since 1 January 2014, the Group has built considerably on its relationship with Greater China: 7 new Chinese companies have been admitted to London Stock Exchange; 10 new RMB bonds have been issued in London and six new RQFII ETFs have listed on the market, including the first ETF in Europe denominated in RMB.
Naturally Hong Kong brokers will be wary of the new arrangement believing that the London agreement would see them try to tap in to the rise of Chinese capital markets adding even more competition.
The London bourses chief however played down that idea. "The London Stock Exchange is not a competitor to Hong Kong but we could have a cooperation relationship," he said.
