The State Administration of Foreign Exchange of the People's Republic of China has eased the rules for investing in China's financial markets through the Qualified Foreign Institutional Investor program. They eliminated the $1 billion limitation on investments and changed the minimum statistics of the investor. The manager must have $500 million (amended from $5 billion) in assets under management and have a track history of at least 2 years (amended from 5 years). The entire process to obtain entrance into the program is now about 7 to 8 months. Previously, it would take a year and a half. The changes have been targeted to long term investors such as sovereign wealth funds, central banks, monetary authorities, insurance companies, endowments and pension plans. Fund managers with a high turnover rate, such as hedge funds, mutual funds and investment banks, were not included in the rules changes. Overall, by 2015, consulting firm Z-Ben Advisors Co. Ltd. of Singapore is predicting that asset management firms and asset owners will dominate the landscape. They will push out the investment banks, who now have 51% share in the program. Also, last year the ceiling on the program was elevated to $80 billion from $30 billion. About $6 billion has been invested since then. It is expected that the remaining $44 billion will be invested over the next 2 years.
The article from Pensions & Investments may be accessed here.
