Hong Kong's Securities and Futures Commission has given regulatory approval to allow Hong Kong firms to become members of London Stock Exchange.

Membership of the London Stock Exchange will allow trading firms to connect directly to the orderbook, and to trade central counterparty cleared securities. 

"This is a significant development in further deepening the ties between London, Hong Kong and China," said Alexander Justham, CEO of the London Stock Exchange. 

"As members of London Stock Exchange, Hong Kong firms will be able to offer their customers access to the most liquid European market. Like Hong Kong, London has always been a market open to the world and we are excited about the increasingly strong relationship being forged between these two exceptional global financial centres."

The membership will also allow Hong Kong firms access to London Stock Exchange Derivatives Market which provides trading in derivative contracts in UK securities and Global Depositary Receipts.

Since January 1 2014, the Group has built considerably on its relationship with Greater China. Seven new Chinese companies have been admitted to London Stock Exchange; ten new RMB bonds have been issued in London and six new RQFII ETFs have listed on the market, including the first ETF in Europe denominated in RMB.

In the same period, the Group has also signed four memoranda of understanding with leading Chinese market participants including Agricultural Bank of China, Bank of China, China Construction Bank and Haitong Securities.