Published On: Wed, Apr 30th, 2014

SZSE Issued Rules on Securities Trading of QFII and RQFII

Chen Dongzheng Chairman SZSE

Chen Dongzheng Chairman SZSE

Shenzhen Stock Exchange (SZSE) issued on 25 April Implementation Rules on Securities Trading of Qualified Foreign Institutional Investor and RMB Qualified Foreign Institutional Investor on Shenzhen Stock Exchange, (hereinafter referred as Rules on Securities Trading of QFII and RQFII). The rule covers qualified foreign institutional investors and RMB qualified foreign institutional investors (hereinafter referred as ‘qualified investors’) in the supervision range.

Comparing to Implementation Rules on Securities Trading of Qualified Foreign Institutional Investor on Shenzhen Stock Exchange issued in 2002, Rules on Securities Trading of QFII and RQFII mainly has amendments on the following content: firstly, investment range has been expanded, with qualified investors being able to invest in the stock, bond, fund, warrant, and asset-backed securities and other types of securities traded or transferred on SZSE; secondly, the number of securities company to be committed has been increased, for instance, a single qualified investor might commit 3 securities companies in maximum to handle SZSE securities trading; thirdly, limitation on the percentage of shareholding in a company by foreign investors has been loosened, i.e. the maximum percentage of share held in an A-share public company by all the foreign investors will be loosened from 20% to 30%; fourthly, the disposal method of reducing shareholding more than proper proportion is explicitly defined. More than proper proportion shareholding reducing by qualified investors should be conducted sequentially according the category of the share held, and the Rules made a specific description on the category of shares held.

Relevant principal from SZSE indicated that the enacting and implementation of Rules on Securities Trading of QFII and RQFII was conducive to the participation of qualified investors in the trading on SZSE, facilitating the internationalization of the capital market and enlargement the institutional investors group. In order to facilitate the qualified investors to register, SZSE will also issue relevant guideline to the registration of relevant business as a supportive measure, the attention to which from related market participants is warmly welcomed.

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