Taiwan’s SITCA seeks QFII expansion
10 December 2012
News, Asia, China, Taiwan
By Hui Ching-hoo
Taiwan’s Securities Investment Trust & Consulting Association (SITCA) has proposed several initiatives to China’s regulators to further promote the development of qualified foreign institutional investor (QFII) funds.
As such, SITCA has suggested shortening the approval processes from one year to six months, and raising quotas for the island’s QFII applicants. Meanwhile, SITCA proposes the QFII cap on fixed income allocations be increase from 30% currently to 50%, according to Economic Daily News.
The association has further urged China’s regulator to halve the lock-up period for QFII institutions, which would enable institutions to repatriate their funds back to Taiwan within six months of closing out investments. In addition, it has proposed lowering or removing restrictions on RMB remittance.
National Chengchi University professor of finance Edward Chow tells Asia Asset Management that Mainland and Taiwan financial regulators have held talks to raise the QFII quota in preparation for the launch of RMB products in Taiwan next year. Taiwan’s fund managers are very keen to launch RMB products, and concrete details are expected to emerge later this year or early next year, he notes.
While Taiwan’s Financial Supervisory Commission eased restrictions on investing in China in early October, allowing QFII funds to raise allocations to the A-share market from 30% to 100%, the fillip is considered marginal given that total QFII quotas held by Taiwan’s asset managers currently stands at just US$570 million.
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