CHINA: SZSE issues revised rules on China QFII investment

Wednesday April 30 2014

The Shenzhen Stock Exchange (SZSE) has announced that it has issued Implementation Rules on Securities Trading of Qualified Foreign Institutional Investor and RMB Qualified Foreign Institutional Investor on Shenzhen Stock Exchange for China foreign investment.

The rules, when compared with the original 2002 rules, introduce the following changes:

• the investment range has been expanded, with qualified investors being able to invest in stocks, bonds, funds, warrants, and asset-backed securities and other types of securities traded or transferred on SZSE;
• the number of securities companies which may be appointed has been increased, for instance, a single qualified investor may now appoint 3 securities companies in maximum to handle SZSE securities trading;
• limitation on the percentage of shareholding in a company by foreign investors has been increased, i.e. the maximum percentage of share held in an A-share public company by all foreign investors in aggregate will be increased from 20% to 30%;
• the disposal method for reducing a shareholding that is in breach of a foreign investment limit is explicitly defined. The disposal by qualified investors should be conducted sequentially according the category of the share held, and the Rules made a specific description on the category of shares held.

Click on the above link for the SZSE press release. Click here for the rules (currently only available in Chinese).