What is QFII and RQFII?

Briefing on QFII Scheme and Its Development

Introduction

Qualified Foreign Institutional Investor (QFII) Scheme is a transitional arrangement that allows institutional investors who meet certain qualification to invest in a limited scope of cross-border securities products, in the context of incomplete free flow of capital accounts.

Foreign investments in China are restricted due to foreign exchange control. The quota, products, accounts, and fund conversions are strictly monitored and regulated.

QFII scheme was introduced in 2002, allowing foreign investor’s direct access to China's capital market.

QFII Scheme Milestones



Briefing on RQFII Scheme and Its Development

RMB Qualified Foreign Institutional Investor (RQFII) Scheme was initiated in late 2011, it allows the use of RMB funds raised in Hong Kong by the subsidiaries of domestic fund management companies and securities companies in Hong Kong (hereinafter referred to as “Hong Kong subsidiaries”) to invest in the domestic securities market.

To invest in the domestic securities market, a Hong Kong subsidiary must obtain the approval of the China Securities Regulatory Commission (CSRC) and obtain the investment quota approved by the State Administration of Foreign Exchange (SAFE).