China’s State Council approves huge increase in RQFII scheme quota
14 November 2012
News, Asia, China
By Hui Ching-hoo
China’s State Council has given the green light to the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange (SAFE) to up the RMB Qualified Foreign Institutional Investors (RQFII) scheme’s total quota from the current 70 billion yuan (US$11.1 billion) to 270 billion yuan, according to the China Securities Journal on Wednesday (November 14).
The move follows on from CSRC Chairman Guo Shuqing’s announcement last weekend at a press conference at the 18th Communist Party Congress that the body was considering lifting the quota of the RQFII scheme in response to a request from authorities in Hong Kong, as they complained the existing quota was insufficient to meet demand.
The China Securities Journal report said the regulatory bodies are amending the ‘Measures for Pilot Domestic Securities Investment made by RMB Qualified Foreign Institutional Investors of Fund Management Companies and Securities Companies’ in order to further standardise the investment scope available to RQFII participants.
Separately, SAFE announced on November 13 that it granted an additional 9 billion yuan in RQFII quotas in October – China Asset Management (Hong Kong), CSOP Asset Management, and Harvest Global Investments received 3 billion yuan each. Up to the end of October, SAFE has dished out a total of 48 billion in RQFII quotas.
Meanwhile, the body granted a total of US$2.75 billion in Qualified Foreign Institutional Investor (QFII) quotas to nine foreign institutions. Among them were new QFII participants Metzler Asset Management and Fullerton Fund Management, which received $200 million and $250 million, respectively. AMP Capital Investors, Société Générale, and Barclays Bank were awarded $200 million each. Government of Singapore Investment Corporation (GIC), Temasek Fullerton Alpha Investments, and Fubon Securities Investment Trust received $600 million, $700 million and $150 million, respectively. Up to the end of October, SAFE had approved $33.5 billion worth of QFII quota to 159 foreign institutions.
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