Fidelity gets QFII quota as China lifts limit
China has removed the $1bn investment quota cap for overseas fund management firms and Fidelity Investments is the first to take advantage.
Fidelity Investment Management (Hong Kong) was granted a $1.2bn quota for investment in China's onshore markets under the Qualified Foreign Institutional Investor (QFII) scheme, according to the latest QFII quota awards fact sheet
from the State Administration of Foreign Exchange (SAFE).
QFIIs are the primary method used by overseas financial firms and institutions to invest in China's domestic markets. Foreign fund houses have had a $1bn limit on QFIIs since 2009.
SAFE did not announce a lifting of the quota cap, but an official said China was considering removing the limit shortly before the latest QFII update was released, according to a report in the Global Times.
The removal of the QFII cap is in line with China's liberalisation of the domestic capital markets and the opening of its capital accounts to support the yuan's inclusion in the IMF's Special Drawing Rights (SDRs) international foreign exchange reserve assets, the report said. The IMF is set to hold its five-year SDR review later this year.