Thanks to mainland China’s recent relaxation of the conditions for QFIIs (qualified foreign institutional investors), some Taiwanese banks will be able to obtain QFII status for directly investing in mainland Chinese stocks or accepting the consignment of trust clients for making such investments.
According the mainland’s new regulation, external banks no longer have to be on the list of top 100 banks worldwide, in order to obtain the QFII status. In addition, the required amount for managed securities assets has been halved to US$5 billion.
Mainland China regulates that only financial institutions with QFII status can invest in mainland Chinese stocks. Presently, only some Taiwanese insurance firms and investment trust firms have obtained QFII status for investing in the Chinese stock market. The relaxation of the conditions for the banking industry will also enable some Taiwanese banks to secure the QFII status.
At present, none of Taiwanese banks hits the list of the world’s top 100 banks. However, more than 10 domestic banks have trust funds under their management exceeding US$5 billion.