China's securities regulator yesterday confirmed the creation of a
more level playing field for qualified foreign institutional
investors (QFII).
A
circular released by the China Securities Regulatory Commission (CSRC)
revealed that QFII can now get wider access to the domestic
securities market, besides listed A shares and bonds.
They can also invest in closed-end and open-end funds, with no
investment ratio limits. They will also be able to buy into initial
public offerings, additional share issues, rights shares and
convertible bonds, said the circular published on the CSRC
website.
The move followed recent market speculation that the QFII
investment sphere would be extended.
China issued detailed regulations on the QFII scheme last November,
which went into effect in December as a transitional measure to
open up the securities market when the renminbi is still not fully
convertible under the capital account.
The rules defined that foreign investors that match relative
qualifications can invest in A shares listed in Shanghai and
Shenzhen stock markets, treasury and corporate bonds and "other
financial tools approved by the Chinese authorities," but did not
elaborate on the final part.
So
far, China has approved five domestic banks and three foreign banks
as QFII custodians, which would enable QFII to set up special
accounts and remit money to invest in currently domestic A shares,
funds and bonds.
A
number of foreign institutions are working on their applications to
the CSRC, including Deutsche Bank, UBS Warburg and Goldman
Sachs.
Some have already handed in their initial proposals and are now
finalizing their deals with the custodians.
(China Daily March 20, 2003)