(Oct 28): China’s market watchdog rolled out a plan to simplify rules for its overseas institutional investors programme to attract more long-term funds into the country’s capital markets.
The China Securities Regulatory Commission (CSRC) unveiled a two-year strategy to improve the Qualified Foreign Institutional Investor (QFII) system, vowing to make it easier and faster for global investors to enter the nation’s securities markets. The goal is to increase the appeal of the QFII programme to medium- and long-term capital with better coordination between onshore and offshore funding channels, the regulator said in a statement.
“The plan focuses on improving market access, helping enhance investment efficiency and expanding investment channels,” CSRC chairman Wu Qing said at the Financial Street Forum in Beijing on Monday, according to state media Xinhua News Agency.
Measures under the CSRC plan include simplifying qualified investors’ licensing and registration processes, introducing a “green channel” for sovereign wealth funds, pension and charitable funds, as well as improving the efficiency of fund transfers and account operations.
The regulator will allow foreign institutions to trade exchange-traded fund options and a wider range of commodity futures and options to help their risk management and asset allocation. The watchdog also pledges greater policy transparency and equal treatment of short-term trading rules.
Started in 2002, the QFII programme was for years the main way for foreign investors to access China’s stock and bond markets. The number of QFII investors stood at 907, with their holdings of Chinese shares valued at around 949 billion yuan (US$133 billion) as of the end of August, according to Xinhua.
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Trading links with Hong Kong Exchanges and Clearing Ltd, which allow offshore money managers to trade Chinese stocks and bonds via the former British colony, have in recent years provided an alternative avenue.
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