China raises QFII investment quota

0 Comment(s)Print E-mail Xinhua, July 13, 2013
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The China Securities Regulatory Commission (CSRC) announced Friday that the investment quota of Qualified Foreign Institutional Investors (QFII) has been raised to 150 billion U.S. dollars.

The People's Bank of China, the State Administration of Foreign Exchange (SAFE) and the CSRC all agreed that the pilot scheme of RMB Qualified Foreign Institutional Investors (RQFII) will expand to Singapore, London and other places after Hong Kong.

The rise of the QFII investment quota will attract more foreign investors and promote the reform and development of China's capital market,said the CSRC.

The QFII investment quota was raised from 30 billion U.S.dollars to 80 billion U.S. dollars in April, according to the CSRC.

Latest statistics from the SAFE showed that it has newly granted 6.02 billion U.S. dollars of QFII quotas to 22 foreign institutional investors so far this year, bringing the total QFII quota up to 43.46 billion U.S. dollars with 229 overseas institutions granted licenses.

All overseas investment funds will be approved under the QFII scheme, which was launched in 2002 by the Chinese government to allow licensed foreign investors to buy and sell A-shares when capital accounts are still controlled in the country.

Under the scheme, the CSRC grants QFII licenses and market access to foreign investors, while the SAFE approves quotas for individual QFII funds.

QFII operations over the past 10 years have played an active role in facilitating the opening-up of China's capital market and improving China's institutional framework and investment concept, according to the CSRC.

As for the expansion of the RQFII pilot scheme, its operations in Singapore and London will be applied in accordance with Hong Kong, said the CSRC.

Its data showed it has granted RQFII licenses to 37 institutions so far, with the total investment quota reaching 104.9 billion yuan.

China launched the RQFII scheme in December 2011 to allow a maximum of 20 billion yuan (3.3 billion U.S. dollars) worth of exchange-traded funds raised offshore to be invested in the domestic capital market. The investment quota has been gradually increased to 270 billion yuan.

The RQFII pilot scheme was expanded to cover Hong Kong subsidiaries of Chinese mainland commercial banks and insurance companies or financial institutions which are registered and have major operations in Hong Kong in March, a move which was followed by the launch of the RQFII pilot scheme in Taiwan in June.

Currently, the QFII and RQFII only account for around 1.6 percent of the A-share market in China, providing huge potential to further attract overseas investors, according to the CSRC.


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