CHINA: CSRC Considers Expanding China QFII Program

Tuesday May 8 2012

It has been reported that the Chinese Securities Regulatory Commission is considering allowing hedge funds and private equity funds to join the nation’s China Qualified Foreign Institutional Investor program to further open the country’s capital market.

The Commission is consulting investment bankers regarding the introduction of more types of China QFIIs and will reportedly set separate criteria after conducting a feasibility study.

The initiative comes, following the update of 5 April, 2012, when the authorities raised the combined QFII quota by US$50 billion to US$80 billion and pledged to further expand the project, which lets overseas financial institutions trade Yuan-denominated A shares and bonds on the Chinese mainland.

Under the QFII program, overseas institutions have to receive an investment license from the securities regulator and obtain a quota from the foreign exchange regulator before they can invest in A shares. Currently, major QFIIs include brokerages, banks, mutual funds and insurers.

This information will be updated as more details become available