HSBC completes first securities loans by an offshore investor in China
02 November 2020 Shanghai
Image: Chris _Redan/adobe.stock.com
HSBC has facilitated some of the first securities lending transactions by a foreign investor in Mainland China under the new Qualified Foreign Institutional Investors (QFII) scheme, which came into effect on 1 November.
As of yesterday, HSBC was able to facilitate two transactions on behalf of China Asset Management in Hong Kong and China AMC in mainland China, which were completed on the Shanghai and Shenzhen stock exchanges.
QFII was first launched in 2002 and has seen several key amendments in the past year to make it quicker and easier for foreign investors to apply for and gain QFII status.
The latest amendments include allowing qualified foreign investors to engage in securities finance and margin lending activities, as well as a wider variety of derivatives than was previously allowed.
Among the key changes to the rules is the merging of the QFII scheme with the RMB Qualified Foreign Institutional Investor, which launched in 2011, to simplify the process for those applying.
Moreover, the China Securities Regulatory Commission has also halved the review period to 10 business days.
Other changes include the removal of the asset under management threshold for qualification.
Brian Godins, HSBC's head of securities services, Asia Pacific, says: “The new QFII/RQFII rules mark a new milestone, as China seeks higher-level opening-up of its domestic capital market to foreign investors.”
“Securities lending would help global investors realise flexible strategy deployment as they tap deeper into China's capital market,” he adds.
HSBC was joined in utilising the new trading freedoms in China A-market by Citibank, which has also facilitated several trades on behalf of custodial clients.
As of yesterday, HSBC was able to facilitate two transactions on behalf of China Asset Management in Hong Kong and China AMC in mainland China, which were completed on the Shanghai and Shenzhen stock exchanges.
QFII was first launched in 2002 and has seen several key amendments in the past year to make it quicker and easier for foreign investors to apply for and gain QFII status.
The latest amendments include allowing qualified foreign investors to engage in securities finance and margin lending activities, as well as a wider variety of derivatives than was previously allowed.
Among the key changes to the rules is the merging of the QFII scheme with the RMB Qualified Foreign Institutional Investor, which launched in 2011, to simplify the process for those applying.
Moreover, the China Securities Regulatory Commission has also halved the review period to 10 business days.
Other changes include the removal of the asset under management threshold for qualification.
Brian Godins, HSBC's head of securities services, Asia Pacific, says: “The new QFII/RQFII rules mark a new milestone, as China seeks higher-level opening-up of its domestic capital market to foreign investors.”
“Securities lending would help global investors realise flexible strategy deployment as they tap deeper into China's capital market,” he adds.
HSBC was joined in utilising the new trading freedoms in China A-market by Citibank, which has also facilitated several trades on behalf of custodial clients.
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