By Parin Shah, 18 December 2012, www.prohedge.co.uk
The Chinese Securities Regulatory Commission (CSRC) announced the issue of qualified foreign institutional investor (QFII) permits to 9 firms in November, making domestic Chinese assets more open to foreign investment. QFII licenses issued totalled 201 by the end of November.
The sharp rise in QFII permits issued comes after the CSRC eased regulatory requirements surrounding approval in July. Minimum AUM for firms seeking QFII licenses were cut from $5bn to $500m, with a new minimum operating history of 2 years required, as opposed to 5 years previously. JP Morgan Asset Management Taiwan, CDH Investment Advisory and Daiwa SB Investments were among the firms to gain QFII approval last month.
Regulatory relaxation has also been of benefit to the Hong Kong subsidiaries of Chinese fund houses. Harvest Global Investors (HGI), whose parent company Harvest Fund Management (HFM) is the 2nd largest asset manager in China, was able to apply for a QFII license after the CSRC enacted its new stance. Speaking to AsianInvestor Choy Peng Wah, Chief Executive of HGI, stated that the group has “strong investment capabilities in managing domestic Chinese asset classes” and would look to offer equity and fixed income strategies to institutional clients in Europe and across Asia. HGI must now apply to obtain QFII quotas in order to facilitate new product launches.
The CSRC has issued $36bn in QFII quotas to 165 license holders to date, with this figure looking set to increase considerably going forwards.
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