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.
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
2011年12月21日
中国证监会、中国人民银行、国家外汇管理局16日联合发布《基金管理公司、证券公司人民币合格境外机构投资者境内证券投资试点办法》，允许境内基金管理公司、证券公司的香港子公司，运用在香港募集的人民币资金投资境内证券市场，该文当日生效。初期试点额度约为200亿元（约31亿美元）。在获批的投资额度内，不超过募集规模20%的资金投资于股票及股票类基金，不少于募集规模80%的资金投资于固定收益证券，包括各类债券及固定收益类基金。
这一试点是中国政府增加人民币的吸引力、实现人民币国际化长远目标的另一重要步骤。这一试点是在外汇资金外流的背景下颁布的，可能有助于抵消近期的资金外流、缓解内地证券市场流动性的收缩。因为初期试点额度规模比较小，预期其起到的作用可能有限，但这一举措代表了中国政府进一步开放其限制的资本市场。
根据试点办法，申请人欲成为人民币合格境外机构投资者，应当具备以下条件：
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。
申请人应向中国证监会申请境内证券投资业务资格，中国证监会自收到完整的申请文件之内起60日内作出是否批准的决定。取得境内证券投资业务资格的申请人应向国家外汇局申请投资额度，国家外汇局自收到完整的申请文件之日起60日内作出是否批准的决定。
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。
This article was originally published by Bingham McCutchen LLP.