Funds News
- Regulator extends QDII to funds, brokers
Date: 22-Jun-2007 Sources: (Shenzhen Daily)
THE securities regulator Wednesday issued its first set of rules allowing fund managers and brokerages to invest client money overseas under the Qualified Domestic Institutional Investor (QDII) program.
Notably, the rules will allow money to be channeled into equities in those jurisdictions whose supervisory authorities have signed a memorandum of understanding with their Chinese mainland counterparts.
Analysts said this would primarily benefit Hong Kong, which is expected to be the main market into which mainland institutional investors channel their QDII funds.
The move, announced on the China Securities Regulatory Commission (CSRC) Web site, comes weeks after the banking regulator permitted mainland banks to do the same.
Since QDII was launched in April 2006 as a way of spurring capital outflows and trimming the mainland's balance-of-payments surplus, only one fund manager, Huaan Fund Management Co., has been allowed to take part in the program on a pilot basis.
The new rules, which take effect July 5, pave the way for other firms to start channeling client funds overseas.
The CSRC said that brokerages and fund managers would be allowed to invest client funds in products including commercial bills, government and corporate debt, mortgage-backed securities and structured products.
They would also be able to invest in equities in the 33 jurisdictions that have signed agreements with the CSRC, including Hong Kong, the United States, the United Kingdom, Japan and Singapore, it said.
They may not invest in property, mortgage loans, precious metals or physical goods.
All securities investments in countries other than the 33 with which the CSRC has a memorandum of understanding will be capped at 10 percent of a fund's total, the regulator said.
Firms' fund products must be worth at least 200 million yuan (US$26 million), and collective wealth management products need to reach 100 million yuan, it said.
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