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Pledge to Loosen QFII Rules
CHINA yesterday pledged to make it easier for qualified foreign institutional investors to invest in the country's capital markets - part of the government's efforts to free up capital flows and accelerate the opening of the markets.
The country will lower the QFII threshold, including lowering the QFII asset requirement to US$500 million from US$5 billion, according to a draft of revised rules on the QFII program, which was posted on the website of the China Securities Regulatory Commission yesterday to solicit public opinion.
China will further facilitate the investment and operation of the QFII program by allowing QFIIs to invest in the interbank bond market and stock index futures, according to the draft.
Meanwhile, QFIIs will be allowed to hold up to a 30 percent stake in a listed firm, up from the 20 percent cap now.
"The move shows the country is determined to open up its capital markets. Facilitating the investment and operation of the QFII program will attract more long-term overseas funds to the markets," an unnamed official with the CSRC said, adding that the CSRC welcomes public feedback on the draft.
The State Council, China's Cabinet, in April raised total QFII quotas to US$80 billion from US$30 billion. So far, the CSRC has granted QFII licenses to 172 foreign investors since the program started in 2002.
The CSRC has quickened QFII approvals recently, granting US$5.62 billion in quotas to 51 QFIIs since December.
Foreign investment under the QFII program accounts for 1.1 percent of the total market value of domestic A shares.
Source: Shanghai Daily
