Source of the title map: Visual China, this article comes from WeChat official account: interface news (ID: wowjiemian) , reporter: Man Le
The limit for foreign institutional investors to invest in domestic securities will be lifted.
On May 7, the People ’s Bank of China and the State Administration of Foreign Exchange issued the “Regulations on the Management of Domestic Securities and Futures Investment Funds of Overseas Institutional Investors” (hereinafter referred to as the “Provisions”), which clarifies and simplifies the investment in domestic securities and futures investment funds of foreign institutional investors Management requirements to further facilitate the participation of foreign investors in China’s financial market.
QFII / RQFII domestic investment quota cancellation
The Regulations will implement the cancellation of qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) (hereinafter referred to as qualified investors) domestic securities investment quota management requirements, registration management of remittance and exchange of cross-border funds by qualified investors
According to the requirements, after obtaining the Securities and Futures Business License of the Securities Regulatory Commission, the qualified investor should entrust the main reporter to submit the registration form of overseas institutional investors and a copy of the license of securities and futures business to the State Administration of Foreign Exchange for business registration. .
For this reason, Chen Li, director of the Chuancai Securities Research Institute, said that the comprehensive liberalization of investment restrictions on QFII and RQFII will help the world to be optimistic about China ’s development funds and more fully enter the Chinese investment market. Emerging markets are also a capital depression for global value investment. In addition to the additional liberalization restrictions, further optimizing supporting measures and simplifying related financial procedures in policies will help improve the efficiency of capital flow allocation.
“QFII and RQFII have always been one of the important ways for overseas investment in China, and this time is equivalent to the full expansion of lane traffic,” Chen Li said.
Although the domestic securities investment quota of qualified investors is cancelled, it is worth mentioning that the current QFII / RQFII quota usage rate is limited, far from reaching the total quota limit.
According to the latest statistics from Oriental Fortune Choice, a total of 292 qualified foreign investors have been approved with a QFII investment quota of US $ 114.6 billion, which is only 38.2% of the total utilization rate of US $ 300 billion; and the total RQFII quota is 1.99 One trillion yuan, a total of 262 overseas institutions approved 713.092 billion yuan of investment quota, RQFII total utilization rate is only 35.8%.
“The cancellation of the QFII / RQFII quota is mainly used to boost market sentiment.” A strategic analyst with a medium-sized brokerage in Beijing said that in view of the current limited use of QFII / RQFII quotas, the removal of quota limits in the short term will not bring a large inflow of overseas funds.
But in the medium and long term, the abolition of QFII / RQFII investment quota restrictions has once again improved the convenience of foreign capital allocation of A shares. It is expected that foreign capital will further allocate Chinese capital markets in the future. “In the context of the impact of the new coronary pneumonia epidemic in overseas markets, the good control of the Chinese epidemic has laid the foundation for foreign investors to allocate A shares. The overall A shares are also at a low valuation level, and foreign investors will continue to allocate A shares. trend”. The analyst said.
Yang Delong, chief economist of Qianhai Open Source Fund, also said that the implementation of the cancellation of QFII and RQFII domestic securities investment quota management requirements, and the implementation of registration management for cross-border capital remittance and exchange of qualified investors will help guide more foreign capital into Chinese capital Markets, including stock and bond markets.
After the opening of the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, the channels for foreign capital to flow in and out of A shares have been fully opened up, and A shares have been successively included in the MSCI Emerging Market Index and other international index systems. Yang Delong pointed out that in the past two years, a large amount of foreign capital has flowed into the A-share market to compete for high-quality stocks such as white horse stocks. The annual inflow has reached about 300 billion yuan. In April, foreign capital returned to A shares for 53.3 billion yuan, and it is expected to accelerate into A shares in the future. The policies announced by the central bank today are good for the stock and bond markets, especially the white dragon horse stocks and technology leading stocks with relatively large inflows of foreign capital.
More domestic investment is on the way
In addition to opening the QFII / RQFII investment quota restrictions, the Regulations also provideGeorgian investors are more convenient. In the future, qualified investors will implement integrated management of local and foreign currencies in domestic securities investments, allowing them to independently choose the currency and timing of remitted funds.
The “Regulations” also greatly simplified the procedures for remittance of domestic securities investment income from qualified investors, canceled the requirements for materials such as special audit reports on investment income and tax filing forms issued by Chinese certified public accountants, and replaced them with tax payment commitment letters. In addition, the number of qualified investor custodians has been removed, allowing a single qualified investor to entrust multiple domestic custodians and implement the main reporter system.
The new era chief economist Pan Xiangdong said that the above measures will facilitate capital flow and reduce the risk premium of Chinese assets, making the Chinese market more effective as a “safe haven”, thereby attracting qualified overseas investors to invest in China.
At the same time, complex financial innovations and higher transaction frequencies of foreign-funded financial institutions will trigger cross-institutional and cross-market linkages through channels such as liquidity and product associations, bringing potential risks, but this reform has improved qualified investment For foreign exchange risk and investment risk management requirements of domestic securities investment, the People ’s Bank of China and the Foreign Exchange Bureau will also strengthen post-event supervision to reduce the risks brought by capital opening.
With the inclusion of A shares in mainstream international indexes such as MSCI, FTSE Russell, S & P Dow Jones and Barclays and steadily increasing the weight of inclusion, foreign investors ’investment demand in China ’s financial market has increased accordingly. In recent years, the domestic financial industry has been opened to the outside world, and new measures to facilitate foreign investors to participate in China’s financial market have emerged.
At the beginning of 2019, the CSRC solicited opinions from the public on the revision and integration of the “Administrative Measures on Domestic Securities Investment of Qualified Foreign Institutional Investors”, “Pilot Measures for Domestic Securities Investment of Qualified Foreign Institutional Investors in RMB” and related supporting rules, and plans to bring qualified overseas Institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) The system is combined into one, and foreign institutional investors only need to apply for qualification once. At the same time, the new plan also plans to expand the investment scope of QFII and RQFII to the areas of new third board stocks, private equity funds, futures and other fields.
The latest SAFE Circular on Improving the Foreign Exchange Risk Management of Foreign Institutional Investors in the Interbank Bond Market was also implemented in February this year to further facilitate foreign exchange risk management when investing in RMB bonds.
This article comes from WeChat public account: interface news (ID: wowjiemian) , reporter: Manle