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China grants $5bn in inbound quotas

Also in April, China issued additional outbound quotas to five domestic firms after nearly a year of non-issuance.

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

Nine firms received new or additional QFII quotas in April, with four of them being Japanese firms, according to records from SAFE. In total, the regulator granted $4.2bn in quotas during the month.


QFII granted in April (in US dollars)

Firm Country Additional / new quota received Total quota
Macquarie Bank Australia 500m 1.3bn
Societe Generale France 1bn 2.7bn
Deutsche Bank Germany 400m 1bn
Asset Management One Japan 200m 500m
Mitsubishi UFJ Kokusai Asset Management Japan 300m 300m
Nikko Asset Management Japan 200m 650m
Nomura Asset Management Japan 200m 550m
Nomura Singapore Singapore New quota 500m
Merrill Lynch International UK 1bn 1.94bn
Source: SAFE

On the RQFII front, five firms received new or additional allotments during the month, including Amundi in Hong Kong, which received a quota of RMB 4bn ($590m). It already has a quota under the QFII scheme amounting to $100m, which it received in 2012.

Amundi in other jurisdictions already has RQFII allotments. They include Amundi Singapore (RMB 2.8bn), Amundi Asset Management in France (RMB 2.8bn) and Korea-based NH-Amundi Asset Management (RMB 1.5bn), which is the joint venture firm between NH Financial Group (holding a 70% stake) and Amundi (30%), SAFE records show.


RQFII granted in April (in RMB)

Firm Country Additional Total quota
Cephei Capital Management (Hong Kong) Hong Kong 1.5bn 2.8bn
Zeta Capital (H.K.) Hong Kong New quota 600m
PICC Asset Management (Hong Kong) Hong Kong New quota 2bn
Amundi Hong Kong Hong Kong New quota 4bn
International Monetary Fund New quota 1.6bn
Source: SAFE

In total, the regulator granted RMB 9.7bn in RQFII quotas in April.

Earlier this year, the China Securities and Regulatory Commission proposed combining the two quota schemes, which could help foreign managers with private fund management licences seed their own funds.

Part of the proposal is to expand the investment scope of the inbound schemes, which will include private investment funds, financial futures, commodity futures and options.

Since the quota programmes began, SAFE has awarded a total of RMB 670.67bn in RQFII quotas to 214 licence holders, and $105.8 in QFII quotas to 290 licence holders, according to SAFE.

QDII continues

Separately, the regulator granted five domestic firms in China each received additional QDII quotas of $150m.

The qualified domestic institutional investor scheme allows mainland-based firms to invest in offshore markets.

QDII recipients in April (in US dollars)

Firm Total quota
Huaan Fund Management 1.35bn
Southern Fund Management 2.75bn
China Asset Management 3.65bn
E Fund Management 2.85bn
Guotai Fund Management 550m
Source: SAFE

The last time SAFE granted QDII quotas was in June, according to the regulator’s records.

China revived the QDII programme in April after a long halt. In 2015, authorities stopped issuing QDII quota due to concerns over capital outflows and the effect on the country’s currency.

In total, the regulator has issued $103.98bn in QDII quotas to 152 licence holders since the programme began.

QDII funds, however, had net outflows of around $1.59bn last year, according to data from Morningstar Direct. The products continue to bleed this year, with around RMB 1.12bn in outflows during the first quarter.

However, not all QDII funds saw net outflows, with Greater China, Asia-Pacific (ex-Japan), US and global equity funds having positive flows this year, according to Morningstar.

QDII funds inflows/(outflows) (in RMB m)

Name YTD
Greater China Equity 363
Asia-Pacific ex-Japan Equity 195
US Equity 39
Global Bond 18
Emerging Markets Allocation (7)
Emerging Markets Equity (9)
Other (33)
Global Equity (83)
Asia Allocation (84)
Commodities (158)
Sector Equity (221)
Greater China Allocation (490)
Global Allocation (655)
Total (1,125)
Source: Morningstar Direct

Part of the Mark Allen Group.