(Forbes)China is unlikely to approve the launch this month of a scheme permitTing mainland residents to invest directly in the Hong Kong stock market, with the likely launch date now seen falling after the October holidays, the official Shanghai Securities News reported.

Citing an 'authoritative' source, the newspaper said that the earliest possible date for the scheme to take effect is after the National Day holiday, which begin on Oct 1.

'A lot more preparation work needs to be done,' the source was quoted as saying.

The State Administration of Foreign Exchange announced on Aug 20 that mainland individuals would be able to directly trade in Hong Kong stocks through Bank of China branches in Tianjin, where the scheme is being trialled, amid efforts to reduce liquidity in the system and moderate the growth of China's foreign exchange reserves.

According to media reports, the government has held back on approving the scheme's expansion beyond Tianjin because of fears the direct investment program may take away funds from domestic stock markets or compete with the Qualified Domestic Institutional Investor scheme.

The newspaper also said that the central bank is still studying money-laundering issues to prevent the scheme from being used as a conduit for such activities.