BlackRock awarded first London RQFII licence

30 June 2014   Category: News, Asia, China, Global, United Kingdom   By Daniel Shane

US asset management giant BlackRock has been awarded its first RQFII licence for its London-based subsidiary, which comes as the UK seeks to bolster its credentials as an offshore RMB hub.

In a statement, BlackRock said that BlackRock Advisors (UK) Limited had been granted the licence by the China Securities Regulatory Commission (CSRC), which will enable it to invest directly in mainland China’s domestic A-share equity and onshore bond markets on behalf of its clients.

BlackRock Asset Management North Asia Limited was awarded the firm’s first RQFII licence in March of this year, before receiving an US$320 million investment quota earlier this month.

“The award of our second RQFII licence complements our existing China access licences and is recognition by the CSRC of our commitment to growing the BlackRock China business. It means we will be able to add to the investment solutions we offer to our clients,” commented Thomas Fekete, head of the iShares product team EMEA at BlackRock.

London is aiming to become the top offshore RMB hub in Europe, an area in which it is competing with Paris, Frankfurt and Luxembourg, among others.

Earlier this month, the People’s Bank of China appointed China Construction Bank to become the UK’s first clearing bank for RMB trading. Currently, RMB trades from the UK are predominantly settled via Hong Kong.

The UK also signed a 200 billion RMB, three-year bilateral currency swap deal with China last year.

London has so far been granted 80 billion RMB of RQFII quota from China, and BlackRock’s UK subsidiary will now apply for an investment quota under the scheme from the county’s State Administration of Foreign Exchange.