(China Alert) QFII reforms: Major step towards harmonization
·SAFE’s changes to QFII will redefine the cross-border space
·The base quota has a cap of USD5bn
·MSCI’s A-share inclusion decision could now occur in 2016
Update: SAFE has initiated major changes to China’s inbound investment environment via the QFII program. The most far-reaching being the introduction of a quota registration system based on each QFII manager’s AUM. This effectively introduces quota parity with RQFII and represents the most significant step towards harmonization and liberalization so far. However, there are a few technical aspects still awaiting clarification by SAFE. Large asset managers are the biggest winners from this development, especially BlackRock as it is one of the few firms immediately eligible for the maximum USD5bn base quota. Furthermore, all major impediments to MSCI A-share inclusion have now been removed and this could bring the decision forward from 2017 to 2016.
Z-Ben Advisors believes that these changes are monumental and bear similarity to those seen in the months prior to……
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