Regulator extends QDII foreign investments to securities firms and fund managers
Mainland securities firms and mutual funds have been allowed to invest abroad, as the securities regulator further loosens the purse strings on the nation's financial industry.
The China Securities Regulatory Commission announced yesterday that mutual fund management companies and brokerages could invest in stocks and other structured products overseas through the qualified domestic institutional investor scheme.
The mainland is trying to expand foreign investment and increase cash outflow as pressure mounts on its rising foreign exchange reserves and trade surplus.
Much of the investment is expected to flow to Hong Kong, where fund managers and brokers have the most knowledge.
The new rules are also a way to cool speculation in the domestic stock market by channelling funds overseas. Investors have been pushing stocks of low quality companies to record highs in recent months.