Yan Qingmin, the vice chairman of the China Securities Regulatory Commission, has told the press that his regulatory body will promote the use of China depositary receipts (CDRs), which are similar to American depositary receipts (ADRs), to HNW investors this year.

A depositary receipt is a negotiable financial instrument issued by a bank to represent a foreign company's publicly traded securities (source: Investopedia). With a depositary receipt, a custodial bank in the foreign country holds the actual shares, often in the form of an American depositary receipt (ADR), which is listed and traded on exchanges based in the United States, or a global depositary receipt GDR, which is traded in London, Singapore or other markets. Depositary receipts, then, are not shares but certificates that allow investors to hold shares listed elsewhere. The Chinese Government is thought to fear that new Chinese fintech and other IT companies might list their shares on exchanges outside China, and to hope that CDRs might persuade them otherwise. The regulatory guidelines are expected to come out in the second half of this year and the CSRC will then start accepting applications for CDRs from interested firms.