BEIJING, March 11 (Xinhua) – China has drafted new rules for combining two investment programs for foreign institutional investors, which closed opinion soliciting on March 2 with information disclosure and wider investment scope widely focused on, reported Xinhua-run China Securities Journal.
Earlier on January 31, China’s securities watchdog, China Securities Regulatory Commission (CSRC), released a circular to start soliciting opinions over the draft new rules that combine the existing securities investment schemes for qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII).
According to the draft new rules, QFIIs and RQFIIs are required to consolidate and calculate all the stocks of the same company listed or quoted for trading in China and overseas listed foreign equities of the same company when fulfilling their information disclosure obligations.
For many foreign investors, consolidated calculation of a company’s publicly listed or quoted stocks in China and its equities listed overseas faces difficulties, said Sally Wong of Hong Kong Investment Funds Association.
Currently, subsidiaries of part of multinational asset management institutions generally have demands for investing in China’s securities market. It would be more convenient if applications and distribution of the QFII and RQFII quota between the different subsidiaries of one institution simplify, noted Wong.
After issuance of the opinion soliciting circular, foreign investors widely welcomed Chinese securities regulator’s efforts to simplify investment procedures and further capital market opening-up.
A director of UBS’s securities business in China held foreign investors are highly interested in the enlarged investment target scale for QFIIs and RQFIIs in the draft new rules. As the director said, lack of risk hedging tools remains an obstacle for foreign investors to invest in China’s A shares for a long while and foreign investors welcome inclusion of derivatives into the investment product scale of QFIIs and RQFIIs. Enditem (Edited by Duan Jing, duanjing@xinhua.org)
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