Guidelines to regulate foreign yuan investors
Source: Xinhua |
January 5, 2012, Thursday
|
Print Edition
Print Edition
CHINA'S central bank yesterday issued guidelines to regulate foreign investors' yuan-denominated investment activities in China in preparation for a possible backflow of yuan into the country's equity markets.
New guidelines on the implementation of the Renminbi Qualified Foreign Institutional Investors (RQFII) program by the People's Bank of China came just several days after it approved a 10.7 billion yuan (US$1.7 billion) investment quota for the first RQFII pilot program.
According to the new guidelines, overseas institutions under RQFII pilot programs should open their basic deposit accounts for settlement purposes, as well as special deposit accounts, in a Chinese commercial bank that is qualified to act as a QFII custodian, as well as a settlement agent, in the interbank bond market.
Pilot overseas institutions must create a separate special deposit account for each open-ended fund they launch.
They should not open a general deposit account for cash payments or a temporary deposit account for permanent institutions otherwise approved by the central bank.
Pilot institutions can open three kinds of special deposit accounts for their transactions in the interbank bond market, bourse and the stock markets. Capital can be transferred between the three accounts.
However, institutions can't make capital transfers between special deposit accounts and basic deposit accounts. Cash withdrawals are also prohibited from special deposit accounts.
China announced the RQFII pilot program in December to widen the investment channel for overseas yuan funds and facilitate the yuan's internationalization process.
New guidelines on the implementation of the Renminbi Qualified Foreign Institutional Investors (RQFII) program by the People's Bank of China came just several days after it approved a 10.7 billion yuan (US$1.7 billion) investment quota for the first RQFII pilot program.
According to the new guidelines, overseas institutions under RQFII pilot programs should open their basic deposit accounts for settlement purposes, as well as special deposit accounts, in a Chinese commercial bank that is qualified to act as a QFII custodian, as well as a settlement agent, in the interbank bond market.
Pilot overseas institutions must create a separate special deposit account for each open-ended fund they launch.
They should not open a general deposit account for cash payments or a temporary deposit account for permanent institutions otherwise approved by the central bank.
Pilot institutions can open three kinds of special deposit accounts for their transactions in the interbank bond market, bourse and the stock markets. Capital can be transferred between the three accounts.
However, institutions can't make capital transfers between special deposit accounts and basic deposit accounts. Cash withdrawals are also prohibited from special deposit accounts.
China announced the RQFII pilot program in December to widen the investment channel for overseas yuan funds and facilitate the yuan's internationalization process.
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