Banking News
- Banks allowed to invest in U.K. stocks
Date: 19-Dec-2007 Sources: (Xinhua Online)
THE Chinese Government has signed an agreement with British authorities opening the door for Chinese banks to invest in U.K. stocks and mutual funds, the China Banking Regulatory Commission (CBRC) said Monday.
The memorandum of understanding allows Chinese banks to direct some of their clients' money to Britain through the Qualified Domestic Institutional Investor (QDII) program.
Chinese banks have a total quota of about US$16 billion for investment abroad under the QDII, a scheme launched by China last year to encourage capital flows out of the country and relieve upward pressure on the yuan.
Britain will be only the second market after Hong Kong opened to Chinese banks looking to invest part of their QDII quota, granted by the currency regulator, in stocks and mutual funds.
'This new move will offer (Chinese) investors wider access to the global capital market and it will spread their investment risks,'China's banking regulator said in a statement.
The CBRC also said Chinese banks would soon win permission to invest QDII funds in U.S. stocks and mutual funds as well, echoing an announcement made at meetings last week between the two country's top economic officials.
The Chinese Government loosened its restrictions in May to let banks invest clients' funds in stocks or structured products in overseas markets where local regulators have signed memorandums of understanding with the Chinese banking regulator. Only Hong Kong had done so before Monday's announcement.
Chinese brokers and mutual funds, with a total QDII quota of nearly US$40 billion, are already allowed to invest their customers' funds in stocks in 33 countries.
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