Investment quotas for QFIIs likely to be replenished this year

The State Administration of Foreign Exchange (SAFE) has approved investment quotas for two QFII (qualified foreign institutional investor), bringing the remaining quota to be allocated for QFII trial operations on Chinese markets to 55 million U.S. dollars.

The SAFE will likely replenish the total investment quota this year, industry observers said on Friday.

Of the 52 registered QFIIs, 48 have obtained investment quotas.

China ushered in a QFII system in 2003. With the approval of the State Council, China's cabinet, the total investment quota for QFII operations increased from four billion to ten billion U.S. dollars in September 2005.

According to the SAFE, the two QFIIs that newly obtained investment quotas were HSBC Investment (Hong Kong) Limited and Sumitomo Mitsui Asset Management Company, Limited. They shared 400 million U.S. dollars in quotas equally.

The HSBC Investment (Hong Kong) Limited was approved to open a foreign-exchange account and a RMB special account with the Bank of Communications.

The Sumitomo Mitsui Asset Management Company, Limited was allowed to open a forex account and a RMB special account with the Citibank Shanghai branch, the SAFE said.

Industry observers believe a quota expansion is inevitable. They say the threshold will possibly be lowered for QFII business this year, with five billion to 10 billion U.S. dollars to be added to the total investment quota.

Source: Xinhua