The mainland's securities watchdog will allow Hong Kong, Taiwan and Macao residents living on the mainland to open trading accounts from Monday, in a bid to inject more capital in China's A-share market.

The Shanghai Securities Journal said that the new rule has the potential to help to inject billions of yuan worth of capital into the A-share market, and brokerages have been actively pitching deals to potential customers.

The rule approved by the China Securities Regulatory Commission will broaden the channels for capital to return to the domestic market from Hong Kong, Macao and Taiwan, the newspaper said. It will also boost the two-way flow of capital between the mainland and offshore regions, together with the coming QDII 2, or the second Qualified Domestic Institutional Investors program, that will allow mainland investors to open brokerage accounts in Hong Kong to trade on its stock exchange.

The national census conducted in 2010 showed there are about 450,000 Hong Kong, Macao and Taiwan residents living on the mainland, Xinhua News Agency reported.

China has increased quotas for foreign institutions, pushed for higher dividend payments, tightened rules on de-listing companies and cut trading costs to boost the stock market, which has long been performing below expectations.

The benchmark Shanghai Composite Index fell 0.1 percent to 2234.40 on Wednesday.