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SSGA receives $2bn in RQFII quotas

In total, seven firms in August became first-time recipients of China’s quota programme, allowing them to invest in the onshore markets.

Four State Street Global Advisors (SSGA) entities based in the UK, US and Ireland collectively received RQFII quotas of RMB 14.7bn ($2.14bn) for the first time in August, according China’s State Administration and Foreign Exchange (SAFE).

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

All four SSGA entities first became licence holders in May, according to records from the China Securities Regulatory Commission (CSRC).

This is not the first time that SSGA has invested in onshore markets via the inbound quota channels, SAFE records show. SSGA’s Hong Kong-based entity first received its RQFII quota in 2014, totalling RMB 1bn, plus it also has been a QFII quota holder since 2008, totalling $50m.

Although SSGA has been investing in China’s onshore markets for some time, it is notable as one of the top 50 global asset managers by AUM that it has not established either a joint venture or wholly foreign owned enterprise (WFOE) in China, according to a Z-Ben Advisors report.

Other first-time RQFII recipients are BOB Scotia International Asset Management in Hong Kong, and Foresee Global Asset Management (HK), each receiving RMB 500m in quotas.

Like SSGA, BOB Scotia’s Hong Kong-based entity has been investing onshore via its QFII quota of $200m, which it first received in 2017.

Foresee Global is the Hong Kong-based Chinese subsidiary of Shanghai-based Foresee Investment, which is a quantitative specialist fund manager that caters to domestic qualified investors in China, including institutional and high net worth individuals. It received its RQFII licence in August.

RQFII recipients in August

Firm

Country

New / extra quotas

Total quota

BOB Scotia International Asset Management

Hong Kong

New

RMB 500m

Foresee Global Asset Management (HK)

Hong Kong

New

RMB 500m

State Street Global Advisors

UK

New

RMB 4.2bn

SSGA Funds Management

US

New

RMB 4.4bn

State Street Global Advisors Trust

US

New

RMB 5bn

State Street Global Advisors Irealand

Ireland

New

RMB 1.1bn

Source: SAFE

On the QFII front, Pinebridge Investments in Taiwan received a quota for the first time, while Overlook Investments in Hong Kong was granted additional quotas in August.

QFII recipients

Firm

Country

New / extra quotas

Total quota

Pinebridge Investments Management

Taiwan

New

$100m

Overlook Investments

Hong Kong

$100m

$200m

Source: SAFE

Since the quota programmes began, SAFE has awarded a total of RMB 640.17bn in RQFII quotas to 203 licence holders and $100.16bn of QFII quotas to 286 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 in the past two months. In total, the regulator has awarded $103.2bn in QDII quotas to 152 holders.

Part of the Bonhill Group.