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Another Australia firm gets RQFII quota

Russell Investment Management in Australia received its first RQFII quota to invest in onshore China, becoming the third Australia-based asset manager to be granted an allocation.

China’s qualified foreign institutional investor scheme (QFII) and its renminbi equivalent (RQFII) allow foreign institutional investors to invest in onshore Chinese assets, within allocated quotas.

Russell Investments received an RQFII quota of RMB 906m ($136.95m), according to records from China’s State Administration for Foreign Exchange. Globally, this is not the first time the firm is investing onshore. Its Ireland-based entity has a QFII quota of $200m, which was granted to the firm in 2014.

Russell Investments in Australia was not available for comment.

The first Australia-based firm that received an RQFII quota was Vanguard in Australia, which received RMB 30bn in quotas in January last year. The second was Van Eck Investments, which received RMB 1.1bn in May.

The RQFII programme was first extended to the country in 2014 and was given an aggregate quota ceiling of RMB 50bn.

No new or additional QFII quotas were given last month, the records show.

Since the quota programmes began, SAFE has awarded a total of RMB 590.36bn in RQFII quotas to 192 licence holders and $94.72bn in QFII quotas to 287 licence holders, according to SAFE.

RQFII and QFII bring capital into China. By comparison, the qualified domestic institutional investor (QDII) scheme provides quota for onshore investors to invest offshore.

SAFE stopped issuing new QDII quota in March 2015 due to concern over capital outflows and the subsequent effect on the RMB currency.

Part of the Mark Allen Group.