Investor Presentaiton
China Connect vs. RQFII/QFII
Key differences between China Connect and RQFII/QFII
6
Eligible
Investors
Quota
Eligible
Investments
China Connect (Northbound)
Available to all overseas investors
since day 1
Except ions: ChiNext are limited to
Professional Institutional Investors at
initial stage)
No license required from CSRC
Daily Net Buy Quota: RMB 13 billion
each for Shanghai and Shenzhen
No aggregate total quota ceiling
• No approval from SAFE or CSRC
required
Constituent stocks of SSE 180 & 380,
SZSE Component Index and SZSE
Small/Mid Cap Innovation Index with
market capitalization > RMB 6 billion¹
• All dual-listed shares i.e. SSE-SEHK
and SZSE-SEHK A+H
Exceptions: Shares not traded in
RMB, Shares under "risk alert", IPOS
RQFII (since 2011)
• Only available to approved RQFII
jurisdiction (currently 17)
Subsidiaries of PRC fund management
companies, securities companies,
domestic commercial banks, insurance
companies based in the RQFII jurisdiction
• Other institutions registered and mainly
operated in the RQFII jurisdictions and
possess asset management license from
the relevant regulators of their jurisdictions
• Quota approved: RMB510 billion (Aug '16)
for 208 RQFII entities
• Go through a filing process only
o if the applied quota <="Basic Quota❞ for
commercial institutions outside Mainland.
Additional quota requires approval from
SAFE
SWFs, central banks and monetary
authorities are not subject to Basic Quota
and are able to file the intended investment
quota according to their investment needs
All SSE and SZSE stocks
Corporate, government, enterprise,
convertible and interbank bond market
• Securities investment funds including
closed-end, open-ended and ETFs
• Others such as warrants, index futures,
IPOS
QFII (since 2002)
Only available to qualified institutions in markets
with MOU with China (currently 55)
Commercial Banks (≥ 10yrs in operation, US$5
billion AUM, US$300mm Tier 1 Capital)
Securities Companies (≥ 5yrs in operation, US$5
billion AUM, US$500mm Capital)
• AMC, insurance companies and other institutions
(experience of 2+ years, and AUM ≥ US$500mm)
• Quota approved: US$81.48 billion (as of Aug '16)
for the 299 QFIls from 30 countries
• Go through a filing process only
o if the applied quota <="Basic Quota" for
commercial institutions outside Mainland
o if the applied quota < = US$5 billion for SWFs,
central banks and monetary authorities,
• Additional quota requires approval from SAFE
• Minimum Basic Quota of each QFII is USD 20MM
• Same as RQFII
Subject to final regulatory approval, the periodic review of eligible stocks will be in line with half-yearly rebalancing of underlying indexes e.g. 6-month daily average 1 Nov 2015 till 30 Apr 2016
(review period for end 2016 launch)
1.
2.
Basic Quota for commercial institutions outside of Mainland is USD 100 million + 0.2% of the average assets size in past 3 years - Existing quota.
citi
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