China To Loosen Foreign Capital Flow Rules

By Unknown

Minggu, 19 Juni 2016

China To Loosen Foreign Capital Flow Rules

• People's Bank of China (PBoC plans to relax the rules to remove funds QFII
• PBOC also to loosen the rules on when the QFII funds into the country

China's central bank plans to relax rules on when foreign investors can bring money in and out of the country, according to people with direct knowledge of the matter.

rule changes would apply to funds under the qualified foreign institutional investor scheme, which grants quotas to put money in China for investment in domestic stocks and bonds, said the people, who asked not to be identified as the plans have yet to be announced. lock-up periods for the withdrawal of funds QFII China would be relaxed and institutions would also allow more latitude on when they can bring money into the country, they said.

plan

These changes suggest that the turbulence in the Chinese stock market and the exchange rate of the yuan was not derailed by the People's Bank of China to open further the nation's capital account. The people who spoke about plans to loosen controls on QFII funds have described them as part of China's efforts to further open its capital markets.

Under the planned changes, the QFII funds would be allowed to withdraw from the Chinese money on a daily, one of the people said. They are currently subject to lock-up or a week or a month, depending on the type of quota.

The institutions are also allowed to bring a portion of their QFII quota at different times, the person said. They are being given specific QFII quotas and only allowed to bring an amount equal to the quota in a single transaction.

These changes would provide rules for the QFII scheme in line with those of the Renminbi Qualified Foreign Institutional Investor scheme, which allows institutions to raise yuan overseas for investment in China, one person said . Announces changes is awaiting final approval of the plan by top Chinese leaders, they said.

Bloomberg

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