Countdown begins to QDII2 scheme
Work under way to let mainland individual investors put funds directly into HK stocks
Beijing will soon issue a new rule governing individual mainland investors' direct investments in Hong Kong stocks, according to two people with knowledge of the plan.
They said financial regulators were giving priority to the implementation of the qualified domestic individual investors (QDII2) scheme, which could spark a multibillion-yuan outflow into the city's market.
The QDII2 programme, similar to an earlier proposal for a "through train" system that never came to pass, would allow mainland investors to open brokers' accounts in Hong Kong to trade on its stock exchange.
The sources said the QDII2 plan would materialise as early as March, after the National People's Congress.
"Technically, there are no barriers to its launch," one person briefed by senior officials said.
"It's certain there'll be no about-face this time."
In August 2007, the country's foreign exchange regulator said it would let individual mainland investors buy Hong Kong stocks directly, but the plan was scrapped in July 2010, as officials feared that the resulting capital outflow would hurt domestically-listed A shares.