HSBC Global Asset Management has become the first international firm to win an RQFII licence after the programme extended to foreign financial institutions in March.
With a RQFII licence, the fund manager can invest in China’s bond market as well as in A-shares using renminbi. “At this stage we are planning products mainly investing in fixed income securities,” a spokesperson tells AsianInvestor. The bank is applying for quota but did not reveal how much it is seeking.
HSBC Group already possesses three QFII licences, which allow it to directly invest into China in US dollars. But an RQFII licence further reinforces the firm's position as a leading RMB player, says Joanna Munro, CEO for Asia Pacific at HSBC Global AM.
When the RQFII programme launched in 2011, only Chinese fund houses and securities firms’ Hong Kong subsidiaries were eligible to join the pilot programme. In March, China Securities Regulatory Commission (CSRC) extended the RQFII programme to Hong Kong-domiciled financial institutions.
Hang Seng Investment Management, part of the HSBC Group, was granted a RQFII licence in June as the first Hong Kong financial institution to win a RQFII licence, and plans to launch an A-share ETF.
China has been accelerating the opening of its onshore capital market to foreign investors. Just last week, CSRC announced an extension of the RQFII programme to London and Singapore, having admitted Taiwan to the programme in June.
Market players say Chinese authorities are welcoming foreign investors, and one source suggests that Standard Chartered is a front-runner to win a RQFII licence.
As of the end of June, a total of Rmb104.9 billion in quota has been handed to 30 RQFII licence holders.