Chinese authorities will integrate separate investment quotas for foreign institutional investors as they continue to open up the market, starting Nov. 1.
The China Securities Regulatory Commission, People's Bank of China and State Administration of Foreign Exchange set out Sept. 25 measures for the administration of domestic securities and futures investment by qualifying institutional investors. The new rules revise the country's qualified foreign institutional investor program, launched in 2002 and the renminbi qualified foreign institutional investor program, launched in 2011. The two quotas, covering mainland stocks and bonds, were removed last year.
The revisions relax the qualification requirements and aim to facilitate investment by QFIIs and RQFIIs by streamlining application documents, and shortening and simplifying the review process by authorities.
The CSRC also published its provisions on issues concerning the implementation of the measures for the administration of domestic securities and futures investment by QFIIs and RQFIIs.
Other moves by authorities include expanding the asset types that QFIIs and RQFIIs may invest in to include private investment funds, financial futures, commodity futures and securities listed on the National Equities Exchange and Quotations market — an over-the-counter market for public securities that are not listed on the Shenzhen or Shanghai stock exchanges. These investors may also participate in securities lending and bond repurchase transactions.
Financial derivatives contracts and related trading models will be gradually relaxed for QFIIs and RQFIIs "in an orderly manner, which is to be announced by the CSRC upon agreement with the PBC and the SAFE," an announcement said.
The authorities said supervision has also been enhanced.
"Going forward, the CSRC will stay committed to market liberalization and accelerate the two-way opening up of Chinese domestic capital markets at a higher level," the announcement said.