Lack of hedging options for RQFII ETF market-makers

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Market-makers of renminbi qualified foreign institutional investor (RQFII) funds are facing the problem of a lack of available hedging tools due to the restricted access of foreign firms to the onshore market, say market participants. Exchange-traded fund (ETF) market-makers provide secondary market liquidity for ETFs and are crucial for investors to be able to exit their positions. They are required to maintain continuous bids and offers within a predefined spread but according to Ko Tseng,