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Capital Securities to obtain QFII and RQFII licenses in China

Capital Securities Limited

AUCKLAND, NEW ZEALAND, November 17, 2020 / -- In an ambitious move to enter the flourishing China capital markets, Capital Securities has officially filed applications for investment licenses under the Qualified Foreign Institutional Investor (QFII) and Renminbi Qualified Foreign Institutional Investor (RQFII) schemes.

Since the beginning of this year, the Chinese central government has launched a series of relaxing measures, with the objective of expediting the opening of the Chinese capital markets. Most recently, on 25 September, it issued the “Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor Domestic Securities Futures Investment Administrative Measures”, which is scheduled to come into effect on 1 November 2020.

The new measures will significantly reduce the threshold for entry, simplify investment procedures and gradually expand the investment scope of firms under the schemes. Currently, there are more than 322 foreign institutions who have obtained USD$116 billion in investment quotas under the QFII scheme and 231 foreign institutions that have obtained 721 billion yuan in investment quotas under the RQFII scheme.

According to Chief Executive Officer Bruce Darwin, Capital Securities expects to be allocated a combined USD$2 billion in investment quotas under both schemes and will be actively pursuing expansion opportunities in China as part of its global development strategy.

As elaborated by Darwin in a Zoom interview, “We are committed to expanding our services into Asia and obtaining the licenses will allow us to gain a significant foothold in the rapidly developing Chinese markets. Our plans have been in motion for several months now and the initial feedback has been really positive. We are optimistic that a favourable verdict will be released in the near future.”

Economists have indicated that the relaxation of financial regulations will further attract the participation of more foreign investors in China’s securities futures market, and expand the international influence of China’s capital markets as well as further drive internationalisation of the renminbi.

As of the end of the second quarter the market value of QFII-held A-shares was 770 billion yuan, for an increase of 14.4% compared to the end of 2019.

About Capital Securities
Capital Securities was founded in 1999 with the vision of enabling the world’s FX networks digitally via a one-stop liquidity provision and leading technology solutions platform. With over 20 years of experience in the currency markets, Capital Securities have since developed into a leading global execution, clearing and liquidity provider, offering deep liquidity via direct access to top-tier banks, seamless trade execution with innovative technology for our clients around the world.

Jon Ashem
Capital Securities
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