FTSE Russell, the world's second-largest index service provider, announced on Thursday China's A-share market will be promoted to Secondary Emerging Market status and included in the FTSE's global equity benchmarks from June 2019, according to a report by thepaper.cn.

In a statement FTSE Russell said the inclusion of A shares, including eligible large-, mid- and small-cap designated stocks, will be conducted in three tranches as follows: 20 percent in June 2019, 40 percent in September 2019 and 40 percent in March 2020.

On completion, China's A shares are projected to account for 5.5 percent of the FTSE Emerging Index and 0.57 percent of the FTSE Global All Cap Index, which represents initial net passive inflows of $10 billion of assets under management, according to the statement.

It said after each tranche FTSE Russell will evaluate the ability of index trackers to replicate the benchmark change prior to commencing the next tranche.

"China will also be added to our watch list for possible inclusion in the FTSE's global bond indexes. The Chinese authorities have continued to introduce reforms designed to open their market to international investors and have transformed their economy into the second largest in the world," Mark Makepeace, CEO of FTSE Russell, said in the statement.

Makepeace said FTSE Russell, as the first international index provider of the Chinese mainland benchmarks 20 years ago, will continue to work with its global clients to provide benchmark and analytic solutions to facilitate their equity and fixed income investments in the region.

Some initial setbacks arose when the A shares applied for inclusion in the FTSE Russell index. After FTSE Russell announced it would start the transition to include China's A shares in its global benchmarks on May 26, 2015, it turned down the application in 2017 due to the capital liquidity and liquidation problems in the A-share market.

FTSE Russell explained since the addition of China's A shares to the FTSE Watch List, it has evaluated the ongoing initiatives of Chinese authorities to improve global investor access through market reforms such as the Qualified Foreign Institutional Investor (QFII) and Renminbi Qualified Foreign Institutional Investor (RQFII) initiatives.

"Through these improvements and recent enhancements to Stock Connect, China's A shares now meet the requirements for classification within the FTSE Emerging Index," it said.

Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, also said in the statement the promotion of China's A shares to emerging market status within FTSE GEIS is an important next step in the development of China's capital markets and reflects the long-term reforms that have been implemented over the past few years.

The internationalization of China's A-share market has made further progress this year. On Wednesday, global equity indexes provider MSCI announced it had proposed a higher weighting of China's A shares on the MSCI index just three months after it began to include A shares in the MSCI Emerging Markets Index and the MSCI ACWI (All Country World Index), according to a report by Financial Times.

Li Lifeng, a strategist at Sinolink Securities, said the inclusion of A shares in FTSE Russell's index will boost market confidence in the short term, promote the internationalization of A shares, improve the structure of investors, optimize the investment style, and further promote the maturity and perfection of the market system and rules, thepaper.cn reported.