China agrees to raise RQFII quota in preparation for Taiwan link up
30 January 2013
News, Asia, China, Taiwan
By Hui Ching-hoo
The China Securities Regulatory Commission (CSRC) has agreed to raise the total quota on the RMB Foreign Qualified Foreign Investor (RQFII) scheme by 100 billion RMB (US$15.8 billion) in order to promote the RQFII programme to Taiwan’s financial institutions and individuals, following a meeting between the CSRC and the island’s Financial Supervisory Commission (FSC) on Tuesday (January 29).
The incremental quota will allow the channelling of overseas RMB deposits in Taiwan back into the Mainland.
Taishin Securities Investment Trust President Bill Lan tells Asia Asset Management that the 100 billion RMB quota is sufficient to accommodate the island’s market demand for the next one-to-two years: “We are eager to access the programme. However, the regulators have yet to outline the timeline and details of the measures, for example, which types of companies are eligible to apply for the quota.”
Meanwhile, the CSRC plans to double the quota on QDII institutions investing in Taiwan from US$500 million to US$1 billion.
Mr. Lan states that the increased quota remains small compared to the size of the island’s equities market.
The Chinese market watchdog will also loosen the limits on Taiwanese company holdings in Sino-Taiwan securities joint ventures registered in Shenzhen, Shanghai and Fujian to 51% from the current 49%.
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