Background
Regulations of the QFII program were based on "Temporary Regulation on Domestic Securities Investment by Qualified Foreign Institutional Investor" (合格境外机构投资者境内证券投资管理暂行办法), which was publicized on 5th Nov 2002 and ceased to be in effect on 1st Sep 2006, and "Regulation on Domestic Securities Investment by Qualified Foreign Institutional Investor"(合格境外机构投资者境内证券投资管理办法), which is publicized on 24th Aug 2006, and came into effect on 1st Sep 2006.
Pursuant to "Regulation on Domestic Securities Investment by Qualified Foreign Institutional Investor"，to qualify as a QFII, the candidate must:
- have stable finance, good credibility, meet the minimum asset scale set by China Securities Regulatory Commission (CSRC);
- the number of staffs meet the requirement set by the authority in its own country or area;
- has healthy governing structure and complete internal control system, received no significant punishment in the last 3 years;
- candidate's home country has complete legal and supervision system, and its home country or home area has signed Memorandum of Understanding(MOU) with CSRC, and maintains effective supervision cooperation;
- other requirements set by CSRC based on prudence.
- Custody banks
- HSBC
- ICBC
- BoC
E.g.: ICBC acquired the custody license for securities investment fund and became the first commercial bank to run custody business in China. In the past ten years, its assets custody market share kept ranking first in the industry,and business range of custody has been continuously expanding, extending from original single securities investment funds to today's many fields such as social insurance, securities, trust, insurance and QFII, etc. Until now, ICBC has established an asset custody service system covering the most completed categories in China with comprehensive products, and has established the relationship of mutual promotion and joint development with investment funds and assets management industry.(http://www.icbc.com.cn/icbc/sy/default.)
Read more about this topic: Qualified Foreign Institutional Investor
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