INDEX provider FTSE is moving closer toward accepting China’s A shares in its benchmarks after the country failed on only two of nine criteria in a qualification test, a senior analyst at the firm said.

    Eddie Pong, FTSE’s director of research and analytic, told a briefing Friday that China had fallen short because of restrictions on market access for foreigners and a settlements system that is out of sync with international markets.

    But a program to be introduced in October and known as Shanghai-Hong Kong stock connect will give foreigners better access to Shanghai’s A-share market through Hong Kong brokers. That marks a “significant improvement” in allowing access to the Chinese mainland markets, Pong said.

    A shares are the yuan-denominated shares of firms traded on the Shanghai and Shenzhen stock exchanges. At present, foreign investors can only gain access to the A-share market through a quota system.

    Chinese mainland stocks in global indices currently comprise shares listed in Hong Kong, or H shares, and stocks listed on the mainland but denominated in U.S. or Hong Kong dollars, or B shares. (SD-Agencies)