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China loosens rules for foreign investors to move money around

Under the new guidelines, foreign investors will have greater flexibility in how the quota can be applied across open-end funds

PUBLISHED : Tuesday, 08 December, 2015, 10:54am
UPDATED : Tuesday, 08 December, 2015, 11:41am

China’s foreign exchange watchdog is loosening restrictions on its Qualified Foreign Institutional Investors (QFII) scheme, making it easier for foreign investors to transfer funds between some investment products.

The rule change, published on the website of the State Administration of Foreign Exchange on Monday, will allow foreign investors to share their investment quota between different open-end funds.

For other types of funds, the use of quotas are still fund-specific, unless additional approval has been granted.

As of November, SAFE has approved a total of US$90 billion QFII quota scheme that allows overseas investors access to the country’s capital markets.

Launched in 2002, QFII is the oldest channel available for foreign institutions who wish to invest in China. It has also approved 436.5 billion yuan in the Renminbi QFII, or RQFII quota, which allows users to invest with offshore yuan in China’s capital markets.