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.
QFII scheme was introduced in 2002. As one of the first efforts to internationalize the RMB, it allows global institutional investors to directly invest in the RMB denominated capital market on a selective basis.
Once licensed (by CSRC), foreign institutional investors are permitted to buy, with quota approved by SAFE, RMB-denominated A shares and some other RMB-denominated securities in China's mainland securities market.
Established in late 2011, the RMB Qualified Foreign Institutional Investor (RQFII) scheme is a policy initiative that allows foreign investors who hold the RQFII quota to invest directly in Mainland China’s equity and bond markets using offshore RMB .
The RQFII scheme relaxes existing restrictions on currency settlement, adds permissible asset classes, and expands investor eligibility.
The latest quota are shown in the following table:
|Investment quota approved||USD 93.3 billion|
|Investment quota approved||RMB 548.2 billion|
Source: SAFE, as of 31 July, 2017