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Clifford Chance

Clifford Chance

Briefings

China combines QFII and RQFII regimes and expands investment scope

30 September 2020

Following the landmark removal of the investment quota for both QFII and RQFII regimes in May 2020, PRC regulators have released official regulations to combine the two current parallel regimes of QFII and RQFII with a unified set of rules applicable to all QFIIs and RQFIIs (collectively "QFIs"). This represents China's latest step to open up key areas of the onshore financial markets to international investors.

  • The eligibility requirements for QFIs will be relaxed. The application process for QFI licences will also be further streamlined with electronic filing enabled.
  • The investment scope of QFIs will be expanded and more listed investment products, China Inter-bank Bond Market products, and exchange-traded derivatives will become available to QFIs.
  • The corresponding compliance obligations applicable to QFIs are also reinforced. Among others, QFIs should (i) disclose detailed information of the underlying investors involved in the omnibus account for clients; (ii) report offshore hedging positions as required by CSRC; and (iii) monitor the securities holdings of foreign investors under its QFI licence and ensure such foreign investors strictly comply with the relevant PRC rules on disclosure of interests.

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