The China Securities Regulatory Commission announced Thursday that it awarded a renminbi qualified institutional investor license to Singapore sovereign wealth fund GIC Private Ltd.
The GIC can now apply to China’s State Administration of Foreign Exchange for a specific quota to make investments in China’s domestic capital markets.
The move marked the first time an asset owner has gotten an RQFII license since China launched the program just more than three years ago to provide a conduit for offshore renminbi to be invested back into China’s domestic markets. Money management firms, banks and securities firms have been the main recipients of RQFII licenses.
Asset owners have been able to make investments in China’s domestic markets through the qualified foreign institutional investor program launched by China more than a decade ago.
Analysts say compared to the QFII program, the RQFII program places fewer restrictions on investments made by offshore investors.
GIC officials have declined to reveal the size of their fund, beyond saying it’s well above US$100 billion. Some estimates put the value of the portfolio at more than US$300 billion. The Sovereign Wealth Fund Institute estimates GIC’s portfolio at US$320 billion.