New China regulations raise questions for QFII derivatives

Since its launch in 2002, China’s qualified foreign institutional investor (QFII) programme has been a boon for investment banks. But new regulations issued in September 2009 raise significant issues for the derivatives market. Jill Wong reports


The release of new regulations in September 2009 by China’s State Administration of Foreign Exchange (Safe) on the qualified foreign institutional investor (QFII) programme raised both hopes and issues for market participants.

The regulations provide wider access to China’s A-share market through lower entry barriers and an increase in the maximum quota limit for individual QFIIs to $1 billion from $800 million. However, by prohibiting the transfer or resale of QFII quotas, the new rules have

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