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O’Melveny & Myers Publishes Paper on QFII and RQFII Liberalization: China’s Changing Regulatory Regime

January 1, 0001

 

Since its inauguration in 2006, the qualified foreign institutional investor (“QFII”) program has served as a bridge between foreign capital and China’s domestic securities markets and is expected to become more instrumental in the further opening up and liberalization of China’s domestic capital markets. In 2011, China’s regulators introduced the Renminbi equivalent, RQFII program, which aims to provide foreign investors additional access to China’s capital markets.

O’Melveny has assisted many clients and investment managers in navigating the complexities of inbound investment, including compliance with the constantly changing regulations. Finding a way through the regulatory maze is worth the effort, as foreign investors will benefit as China further opens up its capital markets.

In the linked article, we discuss the basics of the QFII and RQFII program, as well as issues that in our experience are of most concern by investors, including:

  • What are the key differences between QFII and RQFII?
  • How to apply for a QFII/RQFII quota?
  • What are permitted investments for a QFII/RQFII?
  • How to set up and manage QFII/RQFII accounts?
  • How to remit into or repatriate funds out of China?
  • What are the restrictions with regards to QFII/RQFII investments?
  • What are “Open-ended China Funds” and where/how to set them up?
  • What are the tax implications of participating in these programs?

To discuss any aspect of this report, contact Larry Sussman or any of the other authors listed at right.

Click here for a PDF copy of the report.


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