China grants Ashmore RQFII status

08 January 2014   Category: News, Asia, China, Hong Kong, United Kingdom   By Asia Asset Management

Specialist emerging markets investment manager Ashmore has become the first investment manager outside of Hong Kong to be granted RMB Qualified Foreign Institutional Investors (RQFII) status by the China Securities Regulatory Commission (CSRC).

RQFII status allows international investors unprecedented access to the Chinese onshore equity and fixed income securities markets. The scheme allows for improved ease of repatriation of funds compared to the existing QFII scheme, and provides more flexible investment guidelines for investors looking to invest in China, which Ashmore believes will have numerous benefits to its clients.

The RQFII London scheme facilitates the investment of the growing pools of offshore RMB (CNH) held by large corporates and retail investors in the onshore Chinese securities markets. Other currencies can also be invested onshore through a RQFII account as CNH is freely convertible with many currencies. Ashmore is the first non-China based asset manager to be granted RQFII status and is working with HSBC, which becomes the first onshore Chinese custodian bank servicing a London-based asset manager under the RQFII scheme.

Commenting on the announcement, Jan Dehn, Ashmore's head of research, says: “China has been one of the most compelling, yet difficult markets for investors to access. The scale of the investment opportunity in China is enormous. China’s over US$4 trillion interbank bond market is poised for considerable growth and development as China continues to liberalise, and the over $3.5 trillion A-shares equity market already has a market capitalisation above that of the London Stock Exchange. Both these markets have traditionally been difficult for international investors to access until now.”

Christoph Hofmann, Ashmore's global head of distribution, adds: “The Chinese investment market is one the most dynamic in the world, and securing this licence from the CSRC is a reflection of Ashmore’s long-standing commitment and deep ties to China. Many of our clients are looking for ways to make dedicated investments in China as part of their well-diversified global portfolios. We are very proud that Ashmore has been chosen as the first foreign asset manager to be granted access to one of the most compelling investment opportunities of our time.”