China’s qualified foreign institutional investor scheme (QFII) and its renminbi equivalent (RQFII) allow foreign institutional investors to invest in onshore Chinese assets, within allocated quotas.
UBS Asset Management in Hong Kong received an additional RMB 2bn ($320m) in RQFII quota and now has a total of RMB 3bn.
In addition to its Hong Kong entity, UBS AM in Singapore has an RQFII quota of RMB 2.5bn.
The firm also has QFII quotas: $750m for its Singapore operation and $100m for its Hong Kong entity.
In a vote of confidence for onshore investment, some global asset managers recently increased their RQFII quotas. They include Blackrock and Aberdeen Standard Investments, who are now among the largest RQFII quota holders.
One Asset Management
Under the QFII scheme, Japan-based Asset Management One received a $300m quota for the first time, while the Monetary Authority of Macau received additional quota of $2bn and now has a total of $5bn.
FSA sought more information from Asset Management One, which apparently is making its first foray into the mainland market, but it did not respond in time for publication.
Since the quota programmes began, SAFE has awarded a total of RMB 612.36bn in RQFII quotas to 196 licence holders and $99.16bn of QFII quotas to 286 licence holders, according to the agency’s data.
RQFII and QFII bring capital into China. By comparison, the qualified domestic institutional investor (QDII) scheme is a channel for onshore investors to invest offshore.
However, SAFE stopped issuing QDII quota in March 2015 due to concern over capital outflows and the subsequent effect on the RMB currency.