Chinese fund firm CSOP is intending to use fresh RQFII quota for a FTSE A50 Index exchange-traded fund to be listed on the New York Stock Exchange this June, AsianInvestor can confirm.
Jack Wang, the firm’s managing director and head of sales, revealed the plans after China’s foreign exchange regulator Safe raised CSOP’s renminbi-denominated foreign qualified institutional investor (RQFII) quota by Rmb3.5 billion ($600 million) on April 30.
CSOP aims to use Rmb1.5 billion of its fresh quota for the new ETF. Overall the firm’s RQFII quota now stands at Rmb38.6 billion – 18% of the entire total dished out by State Administration of Foreign Exchange (Safe) to date.
This January CSOP became the first provider to list an RQFII exchange-traded fund on the London Stock Exchange (LSE), as reported.
The asset management firm will partner UK fund manager Source to create its ETF for the New York exchange, reprising the partnership it used for its ETF in London.
Source will sponsor the ETF and CSOP will be the adviser responsible for acquiring RQFII quota and running the fund. The remaining Rmb2 billion of its quota will likely be deployed in its HKEx-listed FTSE A50 ETF.
Separately, Chinese manager E Fund is in the final stages of listing an RQFII exchange-traded fund on the LSE tracking the MSCI China A-share Index. The fund, for which the firm partnered London-based ETF Securities, is expected to be listed mid-May, says a market source.
E Fund also plans to launch an ETF in New York, but is still considering which index to use as China’s A-share market is under consideration for inclusion on the MSCI Emerging Market Index.
Other recipients of RQFII quota announced in April included Da Cheng International, Guotai Junan, GF Asset Management, and Taikang Asset Management, which each received Rmb1 billion.
UBS SDIC Asset Management also received Rmb1 billion, which it is likely to deploy in its China Income Fund, in addition to the Rmb800 million quota it had already put in the fund, notes a market source.
Shenyin Wanguo Asset Management, China Construction Bank International Asset Management and ABC International each obtained Rmb1.5 billion, while Industrial Securities and Mirae Asset Management obtained Rmb800 million each, and Value Partners received Rmb500 million.
As of April 30, Safe had handed out a total Rmb215.6 billion in quotas to 62 RQFII licence holders.
Turning to qualified foreign institutional investor (QFII) quotas, HSBC Global Asset Management has returned $10 million to Safe, the third time since January 2013 that it has handed back part of its quota. Consequently, the firm’s QFII quota has decreased to $412 million.
Meanwhile, Nan Shan Life Insurance obtained an additional $200 million, taking its total quota to $400 million. British Columbia Investment Management and Citic Securities International Investment Management (HK) each received $200 million, taking their overall quotas to $300 million each.
South Africa-based Prescient Investment Management was handed $100 million, and Capital Securities Investment Trust Corporation and the Board of Regents of The University of Texas System, and The Washington University each received $50 million.
As of the end of April, Safe had granted a total of $55.4 billion to 242 QFII licence holders.