Rules on investment in Mainland securities welcomed

December 16, 2011

Financial Secretary John Tsang has welcomed the announcement of the "Rules on Pilot Scheme on Investment in Mainland Securities by Renminbi Qualified Foreign Institutional Investors of Fund Management & Securities Companies" by the China Securities Regulatory Commission.
 
He said it is another important measure in enhancing the circulation of onshore and offshore RMB funds after the announcement of the rules on RMB foreign direct investment in October.
 
The announcement of the rules implements the series of measures unveiled by Vice Premier Li Keqiang during his visit to Hong Kong to support the development of the city into an offshore RMB business centre under the National 12th Five-Year Plan.
 
The rules allow Hong Kong subsidiaries of qualified Mainland fund management and securities companies, as pilot institutions, to use renminbi funds raised in Hong Kong to invest in Mainland securities under an approved RMB investment quota. The initial pilot quota is RMB20 billion.
 
In the initial phase of the pilot scheme, at least 80% of the funds raised by Hong Kong subsidiaries have to be invested in fixed income securities which include different types of bonds and fixed income funds. No more than 20% of the funds have to be invested in equities and equities funds. These seek to control risks.
 
Mr Tsang said the rules will facilitate the launch of more innovative RMB products, which will benefit investors, financial institutions and the financial markets as a whole.