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The U.S. Securities and Exchange Commission (SEC) and the China Banking Regulatory Commission (CBRC) are set to sign a memorandum of understanding allowing Chinese banks to buy shares in U.S. stock exchanges on behalf of Chinese investors within a matter of days, the Wall Street Journal reported Jan. 29.
Chinese banks currently act as the middle men between Chinese financial entities (such as mutual fund companies and insurers) that sell U.S. stock funds and Chinese household investors in the Qualified Domestic Institutional Investor (QDII) scheme. The forthcoming U.S.-China agreement reportedly will give mainland banks the right to design and directly sell U.S. stock mutual funds themselves, expanding their independence and profit margins.
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