First QDII foreign-currency fund in China approved
October 02, 2006 | BY
clpstaff &clp articles &The State Administration of Foreign Exchange (SAFE) has approved China's first qualified domestic institutional investor (QDII) foreign-currency fund;…
The State Administration of Foreign Exchange (SAFE) has approved China's first qualified domestic institutional investor (QDII) foreign-currency fund; Hua An International Balanced Fund has an investment quota of US$500 million.
Investors in China can subscribe to the first foreign currency-denominated QDII fund with a minimum investment of US$5,000 for a term of five years. The QDII fund will invest in a diverse range of products, including global equities, real estate, securities, commodities and global funds.
The QDII rules were introduced in the People's Bank of China, Announcement No.5 on April 13 2006, which opened up the market for Chinese investors to invest in offshore securities through qualified financial institutions. The new rules also permit offshore service providers to target Chinese domestic investors.
On August 18 2006, the China Banking Regulatory Commission gave Lehman Brothers approval to partner with Hua An to set up the QDII fund with a guarantee provided by Lehman Brothers. Lehman Brothers is being advised by Linklaters on this deal.
China Daily reports that Chinese residents already had US$160 billion in foreign exchange deposits by the end of June 2006 and that demand for foreign exchange products is likely to increase.
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