HSBC has become the first foreign custodian bank in China to service a Singapore-based Renminbi Qualified Foreign Institutional Investor (RQFII), following the China Securities Regulatory Commission (CSRC)’s approval of Fullerton Fund Management for an RQFII license under the Singapore RQFII pilot scheme.
As Fullerton Fund Management’s onshore custodian bank in China, HSBC facilitated the asset management firm’s application for a license under the scheme, which is designed to open up China’s securities markets to overseas investors in Singapore. China extended the RQFII pilot scheme to Singapore in October 2013 with a quota of RMB 50 billion being allocated.
“This landmark deal also reinforces Singapore’s position as the leading offshore RMB center in the ASEAN region,” says Tony Lewis, head of HSBC Securities Services in Singapore. “Since the allotment of RQFII quota to Singapore, HSBC has been working closely with financial institutions in Singapore to help them access the Chinese market. We offer clients easy access to our team of experts in China who have been involved in the evolution of the RQFII regime since its inception in 2011.”
Andy Ng, head of HSBC Securities Services in China, adds: “We expect liberalization of the Qualified Foreign Institutional Investor (QFII) and RQFII schemes will speed up as RMB internationalization gathers momentum. We anticipate the RQFII scheme will reach new pilot sites and that regulations surrounding the scheme will be relaxed.”
As of April 30, 2014, HSBC served as the custodian bank for $18.74 billion of investment quota for QFIIs, equivalent to 34.44% of the total amount approved, giving it the largest market share among banks. HSBC also acted as the custodian bank for RMB 89.5 billion investment quota for RQFIIs, equivalent to 40.58% of the total amount approved, according to China’s State Administration of Foreign Exchange (SAFE).
HSBC Becomes First Foreign Custodian in China for a Singapore RQFII
HSBC has become the first foreign custodian bank in China to service a Singapore-based Renminbi Qualified Foreign Institutional Investor (RQFII), following the China Securities Regulatory Commission (CSRC)’s approval of Fullerton Fund Management for an RQFII license under the Singapore RQFII pilot scheme.
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