China Combines QFII and RQFII schemes, Expands Foreign Investment Scope
(05 October 2020 – China) China moved to further ease foreign access to its capital markets, officially combining two major inbound investment schemes and broadening the scope for foreign institutional investment.
The new rules, which will take effect on November 1, combine the Qualified Foreign Institutional Investor (QFII) scheme and its yuan-denominated sibling, RQFII.
Published by the China Securities Regulatory Commission (CSRC), the central bank and the foreign exchange regulator, the new rules will also lower the threshold for overseas applicants and simplify the vetting process. Investors will be allowed to buy securities traded on Beijing’s New Third Board and invest in private funds or conduct bond repurchase transactions.
Foreign institutions will also have access to derivatives, including financial futures, commodity futures and options.
The draft rules were published in January 2019.
“The move will encourage more medium- and long-term funds, including hedge funds and alternative investment funds, to enter the Chinese market directly,” said UBS head of China Global Markets Thomas Fang.
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