(Yicai Global) Dec. 9 -- MSCI’s inclusion of Chinese mainland shares could proceed at a faster pace if China’s planned stock market reforms are accelerated, a top official with the global index provider told Yicai Global.

The main obstacles at the moment are domestic and foreign derivatives, fund settlement, China stock connect trading holidays and comprehensive account mechanisms, Wei Zhen, head of index solutions research at MSCI Asia Pacific, said in an interview.

After Shanghai’s Star Market is included in the list of linkage mechanisms next year, MSCI’s flagship global equity index will also include the Nasdaq-style board’s eligible stocks, Wei said.

If the pace of stock market reform is greater, the inclusion process may speed up, but one prerequisite is for the China Securities Regulatory Commission to accept the Hong Kong Stock Exchange and MSCI China A-share index futures contracts announced in March last year, so as to meet the needs of international investors.

The stock connects between the Chinese mainland and Hong Kong are a sound mechanism, which has been tested by the market in recent years and has been well received by international investors, Wei said. They now have more A-share investment experience, he added, and they will make further suggestions about resolving problems toward the next step for MSCI’s further inclusion of A-shares.

Investors consider different issues, he said, such as whether they are confident in the market and whether funds can flow in and out freely. They also consider more practical issues, especially whether the transaction and settlement processes are convenient.

New York-based MSCI is known mainly for stock indexes, but it has also paid attention to the growth and global appeal of China’s bond market, which will be a key area of interest for investors, Wei said. MSCI will enhance its research and index layout in the Chinese bond market when the time is right, he added.

Editor: Tom Litting