Official says local Hong Kong firms to participate in RQFII scheme
18 January 2013
News, China, Hong Kong
By Hui Ching-hoo
A Hong Kong official said this week that local institutions may be allowed to participate in the Mainland RQFII scheme. Hong Kong-based Hang Seng Bank and BOCI-Prudential Asset Management have both expressed interest in taking part in the programme.
Leung Fung-yee, undersecretary for Hong Kong’s Financial Services and the Treasury Bureau, said at the Asian Financial Forum on January 15 that RQFII licenses may be extended to Hong Kong institutions this year, adding that banks, asset managers and brokerages will have priority in obtaining the licenses.
BOCI-Prudential Investment Products Director Jack Choi tells Asia Asset Management that, “The firm has been striving to extend its products mix to cover RQFII products. We’ve been in talks with the mainland regulator despite having no concrete timeframe in regard to the issuance.”
Mr. Choi adds that its RQFII products are set to fall into the categories defined by the regulator, including ETFs, and bond and equities funds. The CSRC plans to raise the total quota of the RQFII scheme in a bid to widen its investor base rather than differentiate product scope.
Kimman Ngan, head of RMB business strategy and planning department at Hang Seng Bank told local media that the bank is keen to access the RQFII market. The bank will submit an application once further details are announced. He expects the new batch of RQFII products to be A-share focussed.
He added that Hang Seng’s experience in issuing QFII and Mainland bond products will help it explore the RQFII business.
Up to the end of December 2012, the State Administration of Foreign Exchange had granted a total of 67 billion RMB (US$10.6 billion) to the Hong Kong subsidiaries of 24 Mainland financial institutions.
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