The China Securities Regulatory Commission (CSRC), People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) will expand the RMB Qualified Financial Institutional Investor (RQFII) pilot programme to Singapore and London.
The investment quota of Qualified Foreign Institutional Investors (QFII) will be raised to US$150 billion in an attempt to attract foreign investments into China.
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The directive comes after the Chinese government increased the quota from US$30 billion to US$80 billion in April 2012.
This expansion will help the development of the offshore RMB market and promote development of the country’s capital market.
The advancement of the RQFII programme will help to broaden the scheme’s distribution channel and product variety.
Under the scheme, the CSRC grants QFII licenses and market access to foreign investors, while the SAFE approves quotas for individual QFII funds.
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By GlobalDataEleven new institutions have joined the RQFII scheme this year, bringing the total number to 37 institutions. China has approved a total of CNY104.9 billion RQFII quota so far.
The RQFII pilot programme was launched in December 2011 and Chinese authorities raised its quota to CNY270 billion (US$43.98 billion) in November 2012.
RQFII will allow licensed foreign investors to use their off-shore renminbi holdings for trading A-shares. The combined QFII and RQFII investment accounts for approximately 1.6% of the A-share market valuation.
"The new pilot programmes in Taiwan, Singapore and London will follow the same regulations as in Hong Kong," CSRC official said.
