What is Rqfii fund?

An RQFII fund is an investment fund product and not a bank deposit. In general, there is no guarantee of the repayment of principal or dividend payment. The underlying investments of an RQFII fund may fall in value and therefore your investment in the fund may suffer loss even if renminbi appreciates.

What is a QFII in China?

Qualified Foreign Institutional Investor (QFII) and RMB Qualified Foreign Institutional Investor (RQFII) are the quota/approval-based inbound investment programmes launched by the Chinese government in 2002 and 2011 respectively.

How do I get Rqfii?

To gain access to the RQFII Program, investors must complete an application which includes obtaining a license from the China Securities Regulatory Commission (CSRC) and obtaining an investment quota from the State Administration of Foreign Exchange (SAFE).

Who can apply for QFII?

A non-Chinese financial institution may become a QFII if it satisfies the following criteria: (i) it is financially sound and has good credit, has managers with at least five years of fund management experience, has at least US$10 billion in assets under management and has appropriate internal risk controls and …

What is Rqfii quota?

The RQFII program is a modified version of the QFII program and has allowed RQFIIs to invest in companies that are publicly listed on the onshore stock and bond markets in Mainland China via offshore RMB accounts.

How does Bond Connect work?

Bond Connect is a mutual market access scheme launched in 2017 that facilitates cross-border bond trading and settlement. Northbound Bond Connect[1] commenced trading in July 2017 and allowed Hong Kong SAR and other offshore investors to access China’s Interbank Bond Market (“CIBM”).

What is a QFII license?

The QFII Program is the certification system which allows licensed professional foreign investors to trade Ren Min Bi (RMB) denominated securities in China’s mainland stock exchanges by converting foreign currency to RMB within the quota obtained from relevant authorities.

What qualifies foreign investment?

QFI is an individual, group or association which is a resident in a foreign country, making portfolio investment in India. QFI is a subcategory of Foreign Institutional Investors as the QFIs makes foreign portfolio investment. …

How does China bond Connect work?

Bond Connect is a new mutual market access scheme that allows investors from Mainland China and overseas to trade in each other’s bond markets through connection between the related Mainland and Hong Kong financial infrastructure institutions.

Does QFII exist?

Nonetheless, the QFII and RQFII programs have declined in popularity in recent years as foreign investors are now able to access the market directly using other cross-border channels such as Stock Connect and the Bond Connect.

What is the difference between bond connect and Cibm?

Bond Connect provides a more centralized and systematic approach versus CIBM Direct where investors must rely heavily on onshore bond settlement agents. More importantly, Bond Connect enhances operational efficiency, simplifies the account opening process and shortens approval turnaround.

What’s next for QFII/RQFII schemes?

The investable universe of QFII/RQFII schemes is set to get a further boost. Stocks listed on the National Equities Exchange and Quotations (NEEQ), an over-the-counter trading platform, will become accessible to QFIIs and RQFIIs, as will private investment funds, and commodity futures on approved exchanges, as well as the options market.

Can I transfer bond holdings from QFII/RQFII to CIBM direct?

Starting in mid-November, QFIIs and RQFIIs will be allowed to make a free of payment transfer of China Interbank Bond Market (CIBM) bond holdings from QFII/RQFII account to CIBM Direct account without tax consequence. This initiative, however, does not apply to Bond Connect.

What are the implications of China’s proposed rules for foreign investors?

The implications of the proposed rules are substantial for foreign investors (Figure 1). Furthermore, the Chinese government has removed the investment quotas in September this year. According to Shen, this does not have a big impact for existing QFIIs.