China 's stock market watchdog said on Sunday it had allowed local fund management companies to set up branches in Hong Kong, which will help national fund firms become more familiar with international financial rules.

The China Securities Regulatory Commission said fund managers would be able to operate under the Mainland and Hong Kong Closer Economic Partnership Arrangement, a move that Hong Kong's Securities and Futures Commission said would bring more firms to Hong Kong.

The new measures represent a milestone for mainland fund management companies, providing them with a platform to familiarize themselves with international investment and regulatory practices, SFC Chairman Eddy Fong said.

Analysts said the fund firms who owned the business of QDII will be the first team to set up operations in Hong Kong.

China