HSBC will become the first custodian bank servicing London-based RMB Qualified Foreign Institutional Investors (RQFII), after China has given regulatory approval to the London-listed Ashmore Group under the RQFII pilot scheme. The scheme is designed to open up China’s securities markets to overseas investors.
Ashmore Group is the first London based entity to be approved by the China
Securities Regulatory Commission (CSRC) with a RQFII licence to enter China’s domestic securities market. As Ashmore Group’s onshore custodian bank, HSBC facilitated the asset management company’s application under this pilot program.
In October 2013, China allocated RMB80 billion RQFII quota for London, after it decided to expand this pilot scheme for the first time beyond Asia, within which Hong Kong, Taiwan and Singapore are approved for RQFII, respectively.
Andy Ng, head of HSBC Securities Services in China, said: “Ashmore Group’s licence signifies the further liberalization of China’s capital market. This landmark deal also helps strengthen London as an offshore RMB center by opening up a new channel of RMB flows back into China under the RQFII pilot scheme. Leveraging HSBC’s strength as the leading custodian bank in China servicing foreign institutional investors and our global network, including strong collaborations between China and UK teams, we look forward to continuing to support our customers in participating in RMB internationalization and further liberalization of China’s capital market.”
As of December 2013, HSBC China was the custodian bank for $17.1 billion of investment quota for QFIIs, which was equivalent to 34.5 per cent of the total amount approved (according to data from State Administration of Foreign Exchange – SAFE), the largest market share among all banks. It was the custodian bank for RMB65.7 billion investment quota for RQFIIs, which was equivalent to a dominant 41.7% of total amount approved (SAFE).
Ashmore Group is listed on the London Stock Exchange and is a member of the FTSE 250 Index.
HSBC to Grow AuC As London-based Ashmore Gets RQFII Licence
HSBC will become the first custodian bank servicing London-based RMB Qualified Foreign Institutional Investors (RQFII), after China has given regulatory approval to the London-listed Ashmore Group under a scheme designed to open up China's securities markets to overseas investors.