New QFII Rules Promulgated
On 3 February 2016, the State Administration of Foreign Exchange of the People’s Republic of China (“SAFE”) promulgated the Administrative Provisions on Foreign Exchange for Domestic Securities Investments by Qualified Foreign Institutional Investors (“2016 QFII Provisions”), with immediate effect. One of the reforms in the 2016 QFII Provisions is the introduction of a simplified filing procedure for the Base Quota. Under the 2016 QFII Provisions, applications by QFIIs can now be reviewed by custodians. Only applications exceeding a certain investment quota are still subject to approval by SAFE. Also, the upper limit on the investment quota is raised from 1 billion USD to 5 billion USD, while the lower limit is lowered from 50 million USD to 20 million USD. Furthermore, the lockup period has been shortened from 12 months to 3 months. The 2016 QFII Provisions are in line with other measures taken by China to open up the securities market. The new Regulations are available here: http://www.safe.gov.cn/wps/portal.