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.
In December, China Post Global in the UK received an RQFII quota for the first time, amounting to RMB 2bn ($300m), according to records from the State Administration of Foreign Exchange (SAFE).
The firm had obtained an RQFII licence in October, according to records from the China Securities Regulatory Commission (CSRC).
The firm’s Hong Kong-based entity, China Post & Global Asset Management, already has a $100m quota under the QFII scheme, which it received in 2016, according to SAFE records.
Both the London and Hong Kong firms are the international units of Beijing-based China Post and Capital Fund Management, which in turn is 100% owned by China Post Group, a state-owned enterprise controlled by China’s Ministry of Finance.
The London unit is majority-owned (51%) by a mutual fund joint venture between China Post Group and Capital Securities (both state-owned enterprises together holding 76%) and Japan’s Sumitomo Mitsui Banking Corporation (24%).
China Post Global has been active in London, where it launched several exchange-traded funds. In Hong Kong, it plans to launch a global fixed income product, according to records from the Securities and Futures Commission.
On the QFII front, Merrill Lynch International received an additional quota of $290m, making its total QFII quota to $940m, according to SAFE records.
Separately, the CSRC recently proposed to combine 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 648.67bn in RQFII quotas to 206 licence holders, and $101.35bn in QFII quotas to 287 licence holders, according to SAFE.
