The Securities Industry and Financial Markets Association called on China to go further in opening its markets to foreign financial firms.

SIFMA testified before the U.S. House Financial Services Committee today on its desire for China to open its markets to greater participation by foreign financial services firms. “For China, opening their markets would bring capital, expertise, innovation, experience and efficiency,” said Michael Decker, SIFMA’s senior managing director of research and public policy, in his testimony.

“For securities firms in the U.S. and elsewhere, better access to the Chinese markets would bring the opportunity to help build a financial system from its very early stages and would represent an unprecedented commercial opportunity, with major implications for the competitiveness and growth of this vital sector,” he added.

Decker noted that, in conjunction with the U.S. Treasury, SIFMA has urged China to make several key policy changes, including: lifting the effective moratorium on the approval of new joint ventures between Chinese and non-Chinese securities firms; permitting foreign securities firms to own 100% of their local operations in China and to organize themselves in whatever corporate form is best; expanding the types of securities activities that foreign firms can engage in; expanding the Qualified Foreign Institutional Investors program, which permits certain foreign institutional investors to invest in the A shares market; and, finalizing the implementation of the Qualified Domestic Institutional Investor program, which permits Chinese banks to pool funds from local investors to invest outside China.

China agreed to some movement on several of these issues during a recent summit in the US, but its concessions did not go far enough for many.

“In addition, we have urged China to amend its process of developing and implementing domestic market regulations to be more transparent and fair,” Decker said. “We have also recommended changes to China’s interim derivatives rules, which have prevented securities firms from creating and distributing derivative products.”