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.
US-based firms Barings and Bridgewater Associates became first time RQFII quota holders last month. Barings’ RQFII quota is RMB 800m ($117.2m), while Bridgewater’s is RMB 2.6bn, according to SAFE records.
Barings’ received its RQFII licence in September last year, while Bridgewater’s licence was given to the firm in May.
Both firms are also expected to eventually launch onshore private market funds. Last month, Barings was allowed to establish an investment management wholly-foreign owned enterprise (IM WFOE). The next step for the firm is to register for a private fund management (PFM) licence or for a qualified domestic limited partner (QDLP) licence with the Amac.
Hedge fund specialist Bridgewater was registered with the Asset Management Association of China (Amac) as a private fund manager in July.
Another RQFII quota recipient is UBS Asset Management Hong Kong. Its quota was increased to RMB 5bn from RMB 3bn, according to SAFE records. In March, the firm had topped up its RQFII quota to RMB 3bn from RMB 1bn.
UBS AM also has RQFII quotas for its Singapore entity (RMB 2.5bn).
QFII quotas are $750m for its Singapore operation and $100m for its Hong Kong entity.
Like Barings and Bridgewater, UBS has an IM WFOE. It has already launched two onshore funds in China’s private fund market. The firm is also a QDLP licence holder, which allows foreign fund managers to raise onshore capital to be invested offshore.
There were no new QFII quotas given last month, according to SAFE records.
Since the quota programmes began, SAFE has awarded a total of RMB 627.72bn in RQFII quotas to 199 licence holders and $100.46bn in QFII quotas to 287 licence holders, according to SAFE records.
Another quota scheme, China’s qualified domestic institutional investor (QDII) programme, is a channel for onshore investors to invest offshore. No QDII quotas were issued last month. In total, the regulator has awarded $103.2bn in QDII quotas to 152 licence holders.
