Qualified Foreign Institutional Investor
The Qualified Foreign Institutional Investor (QFII; Chinese: 合格境外機構投资者) is a program that was launched in 2002 in People's Republic of China to allow licensed foreign investors to buy and sell yuan-denominated "A" shares in China's mainland stock exchanges (in Shanghai and Shenzhen). Chinese mainland stock exchanges were previously closed off to foreign investors due to China's exercise of tight capital controls which restrict the movement of assets in-and-out of the country.
By the end of April 2011, 103 licenced QFII investors had been granted a combined quota of $20.7 billion to invest in China's capital markets under the QFII program, UBS AG currently holds the greatest single share of quota. Foreign access to China's yuan-denominated "A" stocks are still limited, with quotas placed under the QFII program amounting to US$30 billion.
In April, 2012, the Qualified Foreign investment quota was increased from US$30 billion to US$80 billion. Before the increase, the overall value of approved QFII and RQFII (offshore Renminbi QFII) funds was only 0.8% of total market capitalization and only US$25 billion of the US$30 billion quota was used. While aspects of the increased quota seem likely to take business from Hong Kong, a pilot program in Wenzhou for domestic investors to invest abroad was considered a possible offset for the financial center. The QFII expansion was also followed quickly by the "approval of new ETF products that will be denominated in offshore yuan (CNH) but will trade on the Hong Kong Stock Exchange".
China granted $910 million worth of investment quotas to 11 foreign institutional investors in March 2013 The quotas, under the Qualified Foreign Institutional Investor (QFII) scheme, were awarded to overseas institutions including Generali Fund Management S.A, IDG Capital Management (HK) Ltd and Cutwater Investor Services Corp. y the end of March 2013, China had awarded a combined $41.745 billion of QFII quotas to 197 foreign institutions.
Regulations of the QFII program were based on "Temporary Regulation on Domestic Securities Investment by Qualified Foreign Institutional Investor" (合格境外机构投资者境内证券投资管理暂行办法), which was publicized on 5th Nov 2002 and ceased to be in effect on 1st Sep 2006, and "Regulation on Domestic Securities Investment by Qualified Foreign Institutional Investor"(合格境外机构投资者境内证券投资管理办法), which is publicized on 24th Aug 2006, and came into effect on 1st Sep 2006.
Pursuant to "Regulation on Domestic Securities Investment by Qualified Foreign Institutional Investor"，to qualify as a QFII, the candidate must:
- have stable finance, good credibility, meet the minimum asset scale set by China Securities Regulatory Commission (CSRC);
- the number of staffs meet the requirement set by the authority in its own country or area;
- has healthy governing structure and complete internal control system, received no significant punishment in the last 3 years;
- candidate's home country has complete legal and supervision system, and its home country or home area has signed Memorandum of Understanding(MOU) with CSRC, and maintains effective supervision cooperation;
- other requirements set by CSRC based on prudence.
QFII Qualification Statistics
|No.||Name of QFII||Qualification approved date|
|1||UBS AG||May 23, 2003|
|2||Nomura Securities Co., Ltd.||May 23, 2003|
|3||Morgan Stanley & Co. International Limited||June 5, 2003|
|4||Citigroup Global Markets Limited||June 5, 2003|
|5||Goldman, Sachs & Co.||July 4, 2003|
|6||Deutsche Bank AG or Deutsche Bank Aktiengesellschaft||July 30, 2003|
|7||The Hongkong and Shanghai Banking Corporation Limited||August 4, 2003|
|8||ING Bank N.V.||September 10, 2003|
|9||JPMorgan Chase Bank||September 30, 2003|
|10||Credit Suisse (HongKong) Limited||October 24, 2003|
|11||Standard Chartered Bank (HongKong) Limited||December 11, 2003|
|12||Nikko Asset Management Co., Ltd.||December 11, 2003|
|13||Merrill Lynch International||April 30, 2004|
|14||Hang Seng Bank||May 10, 2004|
|15||Daiwa Securities SMBC Co., Ltd.||May 10, 2004|
|16||Lehman Brothers International (Europe)||July 6, 2004|
|17||Bill & Melinda Gates Foundation||July 19, 2004|
|18||INVESCO Asset Management Limited||August 4, 2004|
|19||ABN AMRO Bank N.V.||September 2, 2004|
|20||Société Générale||September 2, 2004|
|21||Templeton Asset Management Ltd.||September 14, 2004|
|22||Barclays Bank PLC||September 15, 2004|
|23||Dresdner Bank Aktiengesellschaft||September 27, 2004|
|24||Fortis Bank SA/NV||September 29, 2004|
|25||BNP Paribas||September 29, 2004|
|26||Power Corporation of Canada||October 15, 2004|
|27||Calyon S.A.||October 15, 2004|
|28||Goldman Sachs Asset Management International||May 9, 2005|
|29||Martin Currie Investment Management Ltd.||October 25, 2005|
|30||Government of Singapore Investment Corporation Pte. Ltd.||October 25, 2005|
|31||AIG Global Investment Corp.||November 14, 2005|
|32||Temasek Fullerton Alpha Investments Pte. Ltd.||November 15, 2005|
|33||JF Asset Management Limited||December 28, 2005|
|34||The Dai-ichi Mutual Life Insurance Company||December 28, 2005|
|35||DBS Bank Ltd.||February 13, 2006|
|36||AMP Capital Investors Ltd.||April 10, 2006|
|37||Scotiabank or The Bank of Nova Scotia||April 10, 2006|
|38||KBC Financial Products UK Limited||April 10, 2006|
|39||La Compagnie Financière Edmond de Rothschild Banque||April 10, 2006|
|40||Yale University||April 14, 2006|
|41||Morgan Stanley Investment Management Inc.||July 7, 2006|
|42||Prudential Asset Management (Hongkong) Limited||July 7, 2006|
|43||Stanford University||August 5, 2006|
|44||GE Asset Management Incorporated||August 5, 2006|
|45||United Overseas Bank Limited||August 5, 2006|
|46||Schroder Investment Management Limited||August 29, 2006|
|47||HSBC Investments (Hongkong) Limited||September 5, 2006|
|48||Shinko Securities Co., Ltd.||September 5, 2006|
|49||UBS Global Asset Management (Singapore) Ltd.||September 25, 2006|
|50||Sumitomo Mitsui Asset Management Company, Limited||September 25, 2006|
|51||Norges Bank||October 24, 2006|
|52||Pictet Asset Management Limited||October 25, 2006|
|53||The Trustees of Columbia University in the City of New York||March 12, 2008|
|54||Prudential Asset Management Co., Ltd.||April 7, 2008|
|55||Robeco Institutional Asset Management B.V.||May 5, 2008|
|56||State Street Global Advisors Asia Limited||May 16, 2008|
|57||Platinum Investment Company Limited||June 2, 2008|
|58||KBC Asset Management N.V.||June 2, 2008|
|59||Mirae Asset Investment Management Co., Ltd.||July 25, 2008|
|60||ACE INA International Holdings, Ltd.||2008.8.5|
|61||Caisse de dépôt et placement du Québec||2008.8.22|
|62||President and Fellows of Harvard College||2008.8.22|
|63||Samsung Investment Trust Management Co., Ltd.||2008.8.25|
|65||Oversea Chinese Banking Corporation Limited||2008.8.28|
|66||First State Investment Management (UK) Limited||2008.9.11|
|67||DAIWA Asset Management Co.||2008.9.11|
|68||Shell Asset Management Company B.V.||2008.9.12|
|69||T. Rowe Price International, Inc.||2008.9.12|
|70||EARNEST Partners, LLC||January 9, 2012|
|71||Korea Investment Management Co., Ltd.||July, 2012|
- Qualified Domestic Institutional Investor (QDII)
- Xinhua A50 China Tracker
- State Administration of Foreign Exchange (SAFE)
- Economy of China
- Chinese financial system
- Banking in China
- China further loosens its capital controls - International Herald Tribune (August 20, 2007). Retrieved on January 21, 2009.
- Legg Mason Seeks China License to Trade Yuan-Denominated Stocks - Bloomberg (March 10, 2009). Retrieved on March 10, 2009.
- Chiu, Jeckle, et al. "New RQFII Rules Announced: New Ways to Use Offshore RMB - Part II", Mayer Brown (law firm) web post, 4 January 2012. Retrieved 2012-04-10.
- Stephen, Craig, "China’s welcome mat for foreign investors", MarketWatch, April 8, 2012. Retrieved 2012-04-10.
- Sweeney, Pete, "China approves new yuan ETFs in Hong Kong", Reuters, April 19, 2012. Retrieved 2012-04-19.
- 合格境外机构投资者境内证券投资管理办法, xinhuanet.com, 2006年08月26日.
- China Securities Regulatory Commission (中国证券监督管理委员会) website (Chinese)
- Complete list of QFII license holders (English)