Harvest Global Investments (HGI) was one of nine firms to be handed qualified foreign institutional investor (QFII) status by China’s securities regulator.
HGI is already a RQFII holder, but Choy Peng Wah, the firm’s chief executive, confirms to AsianInvestor that it sought a QFII once regulatory requirements were eased earlier this year, meaning it met the requirements.
This July the China Securities Regulatory Commission (CSRC) lowered the entry barrier for asset management companies to apply for QFII permits, slashing the minimum AUM for applicants to $500 million, from $5 billion. It also said firms required an operating history of two years, from five previously.
“We applied for our licence after July 2012 when the QFII regulations were relaxed,” says Choy, adding that HGI already had more than $500 million in AUM at that time excluding RQFII assets.
After the CSRC relaxations, a number of Hong Kong subsidiaries of Chinese fund houses became eligible to apply for a QFII licence.
Hai Tong Asset Management (HK) was granted a QFII licence in September, and in July, E Fund Management(HK) also voiced its interest in applying for a QFII permit.
HGI says it intends to use its QFII licence to make its domestic market expertise available to international clients.
“As a group we have strong investment capabilities in managing domestic Chinese asset classes and strategies and would like to make these available via QFII to our international clients,” says Choy. HGI has institutional clients from Europe and across Asia.
Choy did not disclose what sort of QFII quota HGI was applying for, nor did he offer specifics on product plans, saying generally that it would offer equity and fixed income strategies over time.
HGI received Rmb1.1 billion in the first batch of RQFII quotas and launched a RQFII fixed income fund in February.
It also launched an RQFII exchange-traded fund this September, the HGI MSCI China A ETF, filling an initial quota of Rmb2 billion. An additional Rmb3 billion is yet to be fully utilised.
Meanwhile, Singapore-based APS Asset Management was also granted a QFII licence in this latest batch of awards. APS is a boutique founded by Wong Kok-Hoi in 1995, although Wong did not respond to AsianInvestor queries by press time.
APS and Martin Currie signed a strategic partnership last year, as reported, giving the latter sole global distribution rights to APS’s China A-share investments.
The other financial institutions to be granted QFII licences last month were: JP Morgan Asset Management Taiwan; Aegon USA Investment Management; CDH Investment Advisory; Skandinaviska Enskilda Banken AB; Greystone Managed Investments; Uni-President Asset Management Corporation; and Daiwa SB Investments.
By the end of November, CSRC had granted 201 QFII licences. To date some $36 billion in QFII quotas have been handed to 165 licence holders.