CHINA: Restrictions on China Foreign Investors Eased

Monday May 14 2012

Following the update of 8 May, 2012, regarding the Chinese Securities Regulatory Commission (CSRC) considering expanding the QFII program, it has been reported that China has lessened control on China foreign investors seeking to invest in the country’s capital market. This news comes as efforts are being made to open up its still tightly controlled financial sector to both private and foreign capital.

To give QFIIs more flexibility in their assets allocation, the CSRC will no longer ask them to invest at least 50% of their assets into the stock market given weakening expectations on the yuan’s appreciation after a wider trading band for the yuan against the U.S. dollar.

The requirement for QFIIs to hold less than 20% of cash however, remains unchanged.

This information will be updated as more details become available