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China’s securities regulator plans to ease its restrictions on foreign investors seeking to invest in the country and shorten the approval process for Qualified Foreign Institutional Investor licenses, the state-run Shanghai Securities News reported Wednesday, citing a senior official with the regulator. The planned changes are part of China’s efforts to attract more long-term foreign institutional investors to the country, Wang Lin, director of the China Securities Regulatory Commission’s fund supervision department, was cited as saying. The regulator plans to simplify the review procedure and ease the requirements for application documents, speed up its review and approval for QFII licenses, lower the minimum qualification level for QFIIs, allow more types of foreign investors to invest in China under the QFII program, expand the scope of investment for QFIIs, relax its control on QFIIs’ account opening and fund repatriation, as well as clarify the income tax policy for QFIIs, Wang added. “We will give priority to long-term foreign investors, including pension funds and provident funds, when we review their applications, and will guarantee a threshold of investment quotas for them,” Wang was quoted as saying. “Long-term QFIIs from Hong Kong and Taiwan would receive more favorable policies and we would try to approve their full investment quota applications,” Wang said.

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What is QFII

The Chinese Government has increased the amount of money that foreigners can invest in the domestic capital market from US$30 billion to US$80 billion, the China Securities Regulatory Commission (CSRC) said. The CSRC said that it has granted investment quotas totaling US$24.55 billion to 158 foreign entities under the Qualified Foreign Institutional Investor (QFII) program since its launch in 2002.

Related article:  What is QFII

The China Securities Regulatory Commission (CSRC) said it has granted new licenses to five foreign financial institutions in January, allowing them to invest in the domestic capital market under the Qualified Foreign Institutional Investor (QFII) scheme. The five parties include Sumitomo Mitsui Banking Corporation, Cathay Life Insurance, Meiji Yasuda Asset Management, TransGlobe Life Insurance Inc. and Public Mutual Berhad.

By the end of January 2012, there were 140 QFII investors:

China QFII Member List, February 2012

By the end of January, 2012, there were 140 QFII investors:

China’s securities regulator said that it has accepted an application to launch an exchange traded fund linked to the Hang Seng Index, marking Beijing’s latest effort to further open the country’s rigidly controlled capital account. China Securities Regulatory Commission said in a statement late Monday that the application is from China Asset Management Co., the country’s largest fund manager by assets under management. The ETF will be sold under the current Qualified Domestic Institutional Investors program, which enables selected Chinese financial institutions to buy overseas-listed securities using yuan raised onshore within a preset quota, according to the statement. During a visit to Hong Kong in August, Chinese Vice Premier Li Keqiang announced that China would allow ETFs linked to Hong Kong-listed shares to be traded in mainland China. He also announced several initiatives aimed at easing the flow of offshore yuan traded in Hong Kong back into mainland China.

Hong Kong’s Securities and Futures Commission had approved the first batch of four Renminbi Qualified Foreign Institutional Investors (RQFII) to sell products on Friday, the state-run China Securities Journal reported Saturday on its website. These four companies are CSOP Asset Management Ltd., DA Cheng International Asset Management Co., China Universal Asset Management (Hong Kong) Co. and Guotai Junan International Holdings (GTIJY, 1788.HK), the report said. As RQFII license holders, these firms are allowed to invest yuan raised offshore in mainland China’s capital markets. China’s foreign-exchange regulator had granted CNY10.7 billion ($1.7 billion) worth of quotas for 10 RQFIIs after China’s securities regulator approved 21 Chinese financial institutions as RQFII license holders. China launched the RQFII trial program earlier this month to help internationalize its currency and open further its tightly controlled capital account. The pilot program has a total initial investment quota of CNY20 billion.

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China Will Launch Renminbi Qualified Foreign Institutional Investors Scheme (RQFII) Soon