Following last month’s revamp of the quota system for China’s cross-border investment schemes, some foreign asset managers are unsure of what to do with their QFII and RQFII quota.

Licensed investors under the qualified foreign institutional investor (QFII) scheme, and its renminbi equivalent (RQFII) are now assigned quota based on a percentage of their assets under management (AUM), rather than having to obtain it on a per-application basis.

In any case, the QFII and RQFII schemes look to be growing increasingly obsolete, following the November 2014 launch of the Shanghai-Hong Kong Stock Connect and the opening of China’s interbank bond market to all institutional investors, including asset managers, bar hedge funds. Moreover. the Shenzhen-Hong Kong Connect is reportedly likely to go live in the first half this year.

Indeed, US fund house AllianceBernstein this month will voluntarily hand back the RQFII allowance it uses for fixed-income investments.

However, Manraj Sekhon, chief executive and chief investment officer of Singapore-based Fullerton Fund Management, said the rules needed to be clarified before it would take any such action.

Fullerton has both QFII and RQFII quota ($250 million and Rmb1.2 billion ($185 million), respectively), but with the rules changing in China, this has become less relevant, admitted Manraj Sekhon.

“The regime is in flux, and it is not entirely clear how managers with QFII and RQFII quota should move forward with their existing quotas, because the limits have been lifted,” he noted. “It is now much easier to cross-connect, and it would be useful for Chinese regulators to clarify all these regulations.

“Right now the new regulation suggests what you can invest onshore is a function of your assets under management, so whatever you have already or have received in itself may not necessarily be the limit,” added Sekhon.

Fullerton is ramping up its presence in China. It has a wholly foreign-owned entity in Shanghai, with six investment professionals focused on mainland stocks.

By the end of 2016 the firm will add another member to the China equities team, hire a domestic fixed income analyst and an executive to help lead distribution efforts. The latter role will focus on Chinese institutional investors and private banks and intermediaries whose clients want to allocate offshore.

These additions will complement Fullerton’s offshore and onshore China bond capabilities in Singapore, noted Sekhon.