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New RQFII quota to be invested in A-shares
By Louise Ho |
April 6, 2012, Friday
|
Online Edition
Online Edition
ALL of the newly increased 50 billion yuan (US$7.9 billion) RQFII quota will be invested in A-shares, said an official from China's securities regulator yesterday.
China Securities Regulatory Commission announced earlier this week that the quota for Renminbi Qualified Foreign Institutional Investors program, which is known as RQFII, has been increased from 20 billion yuan to 70 billion yuan.
The previous regulations that not more than 20 percent of the quota can be invested in the stock market will not be applied to the expanded quota, the official explained.
The new quota will be used on yuan-denominated exchange-traded funds on the Hong Kong Stock Exchange that tracks the performance of A-shares, said the official. There was a 20 percent cap on share buying, because the old quota was mainly for buying bonds, the official said.
The RQFII program allows investors to invest yuan funds raised in Hong Kong directly in mainland bond and equity markets. So far, 21 institutions have been approved as investors.
For the preparation of exchange-traded funds listed in Hong Kong that will allow Chinese investors to buy securities listed overseas, the official said the securities regulator is considering allowing investors to invest in foreign currency as an option, which requires a certain technical system. After the system is completed, the Hong Kong exchange-traded fund will be ready to go, the official added.
China Securities Regulatory Commission announced earlier this week that the quota for Renminbi Qualified Foreign Institutional Investors program, which is known as RQFII, has been increased from 20 billion yuan to 70 billion yuan.
The previous regulations that not more than 20 percent of the quota can be invested in the stock market will not be applied to the expanded quota, the official explained.
The new quota will be used on yuan-denominated exchange-traded funds on the Hong Kong Stock Exchange that tracks the performance of A-shares, said the official. There was a 20 percent cap on share buying, because the old quota was mainly for buying bonds, the official said.
The RQFII program allows investors to invest yuan funds raised in Hong Kong directly in mainland bond and equity markets. So far, 21 institutions have been approved as investors.
For the preparation of exchange-traded funds listed in Hong Kong that will allow Chinese investors to buy securities listed overseas, the official said the securities regulator is considering allowing investors to invest in foreign currency as an option, which requires a certain technical system. After the system is completed, the Hong Kong exchange-traded fund will be ready to go, the official added.
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