China Expands Yuan Internationalization Efforts With RQFII Pilot Program

December 20, 2011


China has launched a pilot program under the “Measures on the Pilot Program for Asset Management and Securities Companies to Qualify as RMB Qualified Foreign Institutional Investors” that allows Chinese yuan raised in Hong Kong by Hong Kong subsidiaries of Chinese domestic fund management companies and securities companies to be invested in China’s domestic securities markets. This pilot program was announced jointly by the Chinese Securities Regulatory Commission (“CSRC”), the People’s Bank of China (“PBOC”), and the State Administration of Foreign Exchange (“SAFE”) on Dec. 16, 2011, and became effective on the same date. Under the pilot program, the initial investment quota is RMB 20 billion (USD 3.1 billion), 80 percent of which is required to be invested in fixed-income securities, leaving 20 percent available for the equity markets.

This program represents another step for China to achieve its long-term goal to increase the attractiveness of the yuan as an international currency. It comes at a time when foreign exchange is reportedly flowing out of mainland China, and it may help to offset recent capital outflows and to ease tightening liquidity in mainland stock markets. While the program’s effect is expected to be limited given the small size of the new quota, it represents yet another move to liberalize China’s restricted capital markets.

Under the guidelines, an applicant needs to meet the following qualifications for approval as an RMB Qualified Foreign Institutional Investor (“RQFII”):

1) The applicant shall have been approved by the Hong Kong Securities and Futures Commission to conduct an asset management business and shall maintain its asset management business in sound financial and credit status;

2) The applicant shall have an effective corporate governance structure and internal control system, and its employees shall satisfy the requirements of licensed individuals in Hong Kong;

3) The applicant and its parent company in mainland China shall conduct business in accordance with the relevant regulations and shall not have been assessed of any substantial penalties by its local regulators over the three years prior to application;

4) The applicant’s parent company in mainland China shall have the qualification to conduct a securities asset management business; and

5) The applicant shall satisfy other criteria‚ as stipulated by the CSRC‚ based on prudent regulatory principles.

The applicant must first apply to the CSRC for a Securities Investment License. The CSRC will, within 60 days from the date when the full set of application documents is received, determine whether to grant approval. After obtaining a Securities Investment License, the applicant must apply to SAFE for an investment quota. SAFE shall, within 60 days from the date when the full set of application documents is received, determine whether to grant the requested quota.

The RQFII qualification requirements are similar to those under the QFII rules effective in 2006. RQFII’s decision-making period of 60 days is more than twice as long as QFII’s 20 working days for both Securities Investment Licenses and investment quotas.


For additional information concerning this alert, please contact the following lawyers

Brian D. Beglin, Partner, Corporate Practice Group, Beijing, +86.10.6535.2808 

Anne-Marie Godfrey, Partner, Investment Management Group, Hong Kong, +852.3182.1705

Hisayo Yasuda, Partner, Investment Management Group, Tokyo, +81.3.6721.3141

Akihito Miyake, Counsel, Investment Management Group, Tokyo, +81.3.6721.3172  

Roger P. Joseph, Practice Group Leader, Investment Management Group; Co-chair, Financial Services Area, 617.951.8247

Edwin E. Smith, Partner, Financial Restructuring Group; Co-chair, Financial Services Area, 617.951.8615



人民币合格境外机构投资者试点办法颁布  中国加速人民币国际化进程
作者:Brian D. Beglin, Xiaowei Ye, Ruoke Liu




1) 在香港证券监管部门取得资产管理业务资格并已经开展资产管理业务,财务稳健,资信良好;
2) 公司治理和内部控制有效,从业人员符合香港地区的有关从业资格要求;
3) 申请人及其境内母公司经营行为规范,最近3年未受到所在地监管部门的重大处罚;
4) 申请人境内母公司具有证券资产管理业务资格;及
5) 中国证监会根据审慎监管原则规定的其他条件。


人民币合格境外机构投资者境内证券投资业务资格的申请条件与合格境外机构者资格的申请条件很相似。就监管机关对证券投资业务资格和投资额度的决定时间而言,前者的60天是后者20 个工作日的两倍多。


Brian D. Beglin, 合伙人,公司组,北京,+86.10.6535.2808

Anne-Marie Godfrey,合伙人,投资管理组,香港,+852.3182.1705

Hisayo Yasuda,合伙人,投资管理组,东京,+81.3.6721.3141

Akihito Miyake,顾问,投资管理组,东京,+81.3.6721.3172

Roger P. Joseph,投资管理组负责人,金融服务领域联席主席,617.951.8247

Edwin E. Smith,合伙人,金融重组组;金融服务领域联席主席,617.951.8615

This article was originally published by Bingham McCutchen LLP.