SHANGHAI, May 13 – Plans to allow foreign companies to list on the Shanghai Stock Exchange have already begun as well as the development of an international board.

The local government has concluded an agreement with Britain that aims to improve the stock market. In a press statement of the agreement: “China agrees to allow qualified foreign companies, including United Kingdom companies, to list on its stock exchange through issuing shares or depository receipts in accordance with relevant prudential regulations.”

The deal will allow global British companies like HSBC to offer its shares in Shanghai. HSBC wants to be the first foreign bank to list in Shanghai to strengthen its brand and to attract more funds for its growth in the Chinese mainland market.

The plan to have foreign companies listed in the Shanghai stockmarket already began two years ago when China was considering to allow foreign companies to issue yuan shares to help the mainland stock market which was still in its infancy. But then plans were shelved over fears of a stock glut.

Hong Kong-based Hang Seng Bank and the Bank of East Asia are among the companies who have publicly expressed interest in listing in Shanghai. Foreign companies listing in Shanghai will have a hard time converting fuds from their mainland listings and repatriating the money back because the yuan is currently not fully convertible.

“Apparently, the program was revived,” a Beijing-based brokerage executive close to the China Securities Regulatory Commission told Shanghai Daily. “Preparatory work will be paced up, with the initial arrangement likely to be settled by year end.”