CSRC says QFII, RQFII schemes could be expanded tenfold
15 January 2013
News, China, Global, Hong Kong
By Asia Asset Management
China Securities Regulatory Commission (CSRC) chairman Guo Shuqing is weighing up the possibility that quotas for the Qualified Foreign institutional Investor (QFII) and RMB Qualified Foreign Institutional Investor (RQFII) schemes will be expanded tenfold in the coming years.
Speaking at the Asian Financial Forum in Hong Kong on January 14, Mr. Guo noted that the QFII and RQFII schemes are currently tiny, comprising just 1.5% to 1.6% of the A-share market combined. Therefore, he said the scheme could be expanded by nine or ten times over the long term.
“Last year, we added another 50 billion US dollars to the total investment quota for the QFII scheme, and increased the RQFII investment quota by 250 billion RMB. Three exchanges have now conducted the first global roadshow to overseas institutional investors, and this has generated encouraging results,” he said.
By the end of 2012, the State Administration of Foreign Exchange (SAFE) had granted US$37.4 billion in QFII quotas and 67 billion RMB (US$10.6 billion) in RQFII quotas.
Mr. Guo also revealed that the Chinese government is planning to introduce a second Qualified Domestic Institutional Investor (QDII) pilot scheme this year. The program allows Mainland individuals to invest in overseas fixed income and equities through QDII institutions.
Meanwhile, reforms in the B-share market will be stepped up to help B-share companies better develop operations. Overseas investors will also be welcomed to participate in the development of the crude oil futures, metal futures and financial futures markets, he added.
KC Chan, secretary for financial services and the treasury of Hong Kong noted that many local and overseas asset management firms in Hong Kong will significantly benefit from the expansion of QFII and RQFII schemes.
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