China’s qualified foreign institutional investor scheme (QFII) and its renminbi equivalent (RQFII) allow foreign institutional investors to invest in onshore assets using US dollars and offshore renminbi, respectively, within allocated quotas.
Hall Capital last month received an additional $50m in quotas, making its total QFII quota to $265m, according to records from China’s State Administration of Foreign Exchange (SAFE). It received its QFII licence in 2012.
The firm, an investment advisor with offices in New York and San Francisco, manages assets for families, endowments and foundations.
In terms of RQFII quota, SAFE records show that no new or additional quota was granted to firms last month.
Separately, First State Investment Management (UK) was granted an RQFII licence in May, according to records from the China Securities Regulatory Commission (CSRC). The firm already has a QFII licence with quotas of $630m, according to SAFE.
BOCHK Asset Management was granted a QFII licence in May. It already has an RQFII licence with quota of RMB 800m ($117.6m).
Since the quota programmes began, SAFE has awarded a total of RMB 543.1bn in RQFII quotas to 184 licence holders and $92.7bn in QFII quotas to 283 quota holders.
RQFII and QFII bring capital into China. By 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.
Hong Kong RQFII boost
In a move to further open China’s markets, the People’s Bank of China on Tuesday agreed to increase Hong Kong’s RQFII quota to RMB 500bn. Hong Kong previously had RMB 270bn in quota, which has been fully allocated, according to a statement from the Hong Kong government.
The expansion of Hong Kong’s RQFII quota came after the launch of the Hong Kong-China Bond Connect on Monday.
“Hong Kong’s RQFII quota has been further increased significantly and remains the largest in the world, and this highlights our important role as an intermediary to facilitate overseas investors’ participation in the mainland financial markets,” the statement said.