China’s qualified institutional investor scheme (QFII) and its renminbi equivalent (RQFII) allow foreign institutional investors to invest in onshore assets using US dollars and offshore renmibni, respectively, within allocated quotas.
BOCHK Asset Management received $500m in QFII allowance, according to records from China’s State Administration of Foreign Exchange. The firm received its QFII licence in May and already has an RQFII licence with quota of RMB 800m ($117.6m)
Hong Kong-based ABCI Asset Management last month received an additional RMB 4.46bn in quota, bringing its total RQFII quota to RMB 9.76bn.
ABCI Asset Management is a subsidiary of ABC International Holdings, which is under the Agricultural Bank of China.
It is the first Hong Kong-based firm to take advantage of Hong Kong’s extended RQFII quota allocation. Earlier in July, the People’s Bank of China agreed to increase SAR’s RQFII quota to RMB 500bn. Hong Kong previously had RMB 270bn in quota, which has been fully allocated.
Since the quota programmes began, SAFE has awarded a total of RMB 548.1bn in RQFII quotas to 185 licence holders and $93.27bn in QFII quotas to 284 quota holders.
RQFII and QFII bring capital into China. In comparison, the qualified domestic institutional investor (QDII) scheme provides quota for onshore investors to invest offshore. However, SAFE stopped issuing new QDII quota in March 2015 due to concern over capital outflows and the subsequent effect on the RMB currency.