Gold trading to open up to foreigners in Shanghai

Beijing has promised to make the yuan convertible under the capital account in the zone but has yet to give the go-ahead on this step to institutions and individuals based in the zone.

A liberalised capital account could let foreign investors trade yuan-denominated equities, financial futures and commodity futures - all of which are now off-limits to them. But financial regulators remain concerned over the prospect of a surge in hot money inflows prompted by a fully convertible yuan.

The Shanghai Futures Exchange set up a 5 billion yuan (HK$6.3 billion) subsidiary, Shanghai International Energy Exchange, in the free-trade zone in November last year. Yuan-denominated crude oil futures will be traded on the exchange.

Foreign investors will be allowed to participate in crude oil futures trading as the mainland strives to gain pricing power on the key energy product.

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