CHINA’S securities regulator said Friday it will reform the country’s securities settlement system, to bring it into closer alignment with global practices and to attract foreign capital.

The China Securities Regulatory Commission (CSRC) published draft rules that will bring institutional trading in line with Delivery Versus Payment (DVP), a global practice under which settlement of stocks and cash occurs simultaneously.

Currently in China’s equity market, stocks are settled on the day they are traded but cash settles the next day.

Global investors have long hoped that China can reform its settlement system. The differences create additional costs and risks for overseas investors and their brokers, the ASIFMA, the financial industry body, has said.

The CSRC said Friday that the reform will have no impact on China’s retail investors. It is designed to improve safety in China’s securities settlement system, and further attract foreign money inflows.

In another development, Citigroup Inc. said Friday it has established clearing and settlement services for the new Beijing Stock Exchange and the city’s New Third Board, in order to facilitate foreign investment.

The move enables Citi to support Qualified Foreign Institutional Investors (QFII) to trade in the two equity markets, Citi said in a statement. (SD-Agencies)