Taiwanese buy A-shares and invest in mainland China
China's A-share market is extremely attractive to many Taiwanese investors. However, due to the particularity of China's A-share market, foreigners, including Taiwanese investors, must follow certain procedures and regulations before they can trade. This article will introduce several methods on how to quickly buy China A shares in Taiwan and answer some frequently asked questions.
How to quickly buy China A shares in Taiwan
Re-delegation
Multiple entrustment means that investors entrust Taiwanese securities firms, and then the Taiwanese securities firms entrust Chinese securities firms to conduct transactions. This is a more convenient and common method. Specific steps are as follows:
Choose a Taiwanese securities firm: Choose a Taiwanese securities firm with multiple entrustment business.
Open an account: Open a re-entrustment account with the securities firm.
Order trading: Submit instructions for buying and selling A shares through the trading platform of Taiwan Securities Company.
Example: Suppose Mr. Wang is an investor in Taiwan and wants to buy China A shares. He can choose a well-known securities firm in Taiwan such as Yuanta Securities to open a multiple entrustment account . After opening an account, he can submit instructions for buying and selling A shares through Yuanta Securities' trading platform.
Open an account in China
Another method is to open a securities account directly in China. This requires investors to travel to China in person and complete relevant identity verification and procedures. Specific steps are as follows:
Choose a Chinese securities firm: Choose a Chinese securities firm.
Preparation materials: Have your valid passport and other necessary supporting documents ready.
Open an account in person: Go to the securities firm's business department in person to complete the account opening procedures.
Fund transfer: Transfer funds to a securities account in China and start trading.
Example: Ms. Zhang is an investor in Taiwan. She plans to open a securities account in China for A-share trading. Here is her account opening process:
Choosing a securities firm: Ms. Zhang chose CITIC Securities .
Prepare documents: She prepared a valid passport, Taiwan compatriot card, identity document issued by a Taiwan bank, proof of work in China, proof of residence in China, and proof of a bank account opened at the Industrial and Commercial Bank of China.
Go to the sales department: Ms. Zhang personally went to the sales department of CITIC Securities in Shanghai.
Fill out the application form: In the sales department, Ms. Zhang filled out the account opening application form and signed the account opening agreement and risk disclosure letter.
Identity verification: CITIC Securities verified Ms. Zhang’s identity and conducted a brief interview with her.
Binding bank account: Ms. Zhang bound her account at the Industrial and Commercial Bank of China with her securities account.
Fund transfer: Ms. Zhang transferred the funds from a bank in Taiwan to an account at the Industrial and Commercial Bank of China, and then transferred them to the securities account of CITIC Securities.
After all steps were completed, Ms. Zhang successfully opened a securities account and could start trading A shares.
Can you trade without opening an account?
Currently, there is no legal way to trade A-shares without opening an account. All legal channels require investors to open relevant accounts with securities firms.
Open an account with a foreign securities firm
In addition to opening securities accounts directly in China or investing in the A-share market through multiple entrustments, Taiwanese investors can also choose to open accounts with foreign securities firms to invest. However, they cannot participate in individual stock investments and can only invest in related ETFs to track China. Some targets of A shares. This method is usually more convenient because foreign securities firms usually have more international experience and services. The following will introduce the methods, required documents and steps for opening an account at a foreign securities firm to invest in A-shares.
Examples of overseas brokers include: Mitrade, Futu Securities, Tiger Brokers, and Firstrade.
Assume that Mr. Wang is an investor in Taiwan and he plans to open an account with Firstrade, a foreign securities firm, for A-share trading. The following is his account opening process:
Select the account opening type: Mr. Wang logs onto the Firstrade official website and chooses to open a personal investment account.
Fill in the application form: Mr. Wang filled out the account opening application form online and provided basic personal information and contact information.
Submit documents: Mr. Wang uploaded the required documents, including a valid passport, Taiwan compatriot certificate, Taiwan ID card, and utility bills for the past three months (as proof of address).
Identity verification: Firstrade verified Mr. Wang’s identity and asked him to provide some additional financial information.
Signing the agreement: Mr. Wang signed the account opening agreement and risk disclosure letter online.
Transferring funds: Mr. Wang transferred funds from a bank in Taiwan to the bank account designated by Firstrade, and then transferred them to his securities account.
Trading and Settlement
The trading and settlement of China A shares follow the T+1 rule, that is, they can only be sold on the next trading day after the transaction is completed. However, fund settlement is usually T+2, that is, the funds arrive on the second trading day after the transaction is completed.
Trade B shares and S shares
China B-share market:
Also known as "RMB special stocks", they are special stocks registered and listed in mainland China. The shares are denominated in yuan but can only be subscribed and traded in foreign currencies. Shanghai B shares are settled in US dollars, while Shenzhen B shares are settled in Hong Kong dollars. The issuance of B shares used to be mainly to attract foreign investment, especially when China's capital market was not yet fully open. However, due to low liquidity and low listing volume, it is on the verge of being gradually phased out.
China S-share market:
That is, Singapore stocks refer to stocks registered in China and listed on the Singapore Stock Exchange. Such stocks are traded in Singapore dollars and are primarily traded by international investors. The "S" in S shares stands for Singapore. This type of stock provides a platform for Chinese companies to attract investment from around the world, while also allowing international investors to participate in China's economic growth.
The emergence of S-shares is part of the internationalization strategy of Chinese companies. They broaden financing channels and increase international visibility by listing overseas. For investors, S-shares provide a way to invest in China's growth companies, especially those seeking capital to expand beyond China's home market.
If Taiwanese investors also want to participate in investing in China B shares and China S shares, they need to open a separate account to participate in this market.