The two firms have agreed to work together to develop RMB-denominated exchange funds tracking Chinese securities and yuan-denominated fixed income products.
The deal is also expected to help Chinese investors tap the LSE for initial public offerings and promote development of index- and derivative-based products.
“We are fully committed to supporting Haitong Securities’ ambitions and working to develop the offshore RMB market in London as well as facilitating closer ties between London and Chinese capital markets,” said Alexander Justham, LSE chief executive.
Currently, there are 57 Chinese companies listed in London, but only eight are trading on the main market. There are also 32 dim sum bonds that trade in London.
China has been bringing in measures to open up its capital market and gradually liberalise its currency. These steps including taking the pilot Renminbi Qualified Foreign Institutional Investor (RQFII) programme beyond Hong Kong to markets such as London, Singapore, and Taiwan.
“As China’s capital markets gradually open up, an increasing number of Chinese enterprises are seeking overseas development. These new market dynamics have generated plenty of cross-border financing and investment opportunities,” said Wang Kaiguo, chairman of Haitong Securities.
Haitong Securities is a brokerage in China that also works in investment banking and asset management.
In January, the China Securities Regulatory Commission stopped the firm and a few other brokerages from lending money and stocks to new clients for three months.