China’s CSRC moves to expand RQFII programme
07 March 2013
News, China, Global, Hong Kong
By Hui Ching-hoo
The China Securities Regulatory Commission (CSRC) has implemented the Measures for Pilot Domestic Securities Investment Made by RMB Qualified Foreign Institutional Investors, which is intended to further promote the RMB Qualified Foreign Institutional Investors (RQFII) programme.
Under the existing regime, only the Hong Kong subsidiaries of state-owned lenders, insurers, securities houses and asset managers are allowed to participate in the RQFII scheme. The new measure will extend coverage to the affiliates of the country’s commercial banks and commercial insurers, the CSRC said on its website on Wednesday (March 6).
The measure also loosens restrictions on RQFII products’ asset allocations to equities and fixed income. The relaxation should encourage RQFII institutions to customise their product’s features in accordance with market trends. The regulatory watchdog will streamline the application process in order to smoothen the RQFII fund operations.
The CSRC said it would speed up the liberalisation of local capital market and RMB internationalisation following the amendment of the RQFII regulation.
The RQFII pilot scheme has been growing fast since it was first introduced in Hong Kong in late 2011. Twenty-seven Mainland affiliates have been awarded the licenses, with the quotas totalling 70 billion RMB (US$11.1 billion). The State Administration of Foreign Exchange (SAFE) has already set aside another 200 billion RMB for further expansion of the programme.
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