Authored by: Taylor Hui and Iris Shan
On 13 October 2021, the China Securities Regulatory Commission (CSRC) issued an Announcement on the Participation of Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors in Financial Derivatives Transactions (Announcement, available here in Chinese).
According to the Announcement, with effect from 1 November 2021, Qualified Foreign Investors (QFI) will be eligible to trade commodity futures, commodity options and stock index options listed and traded on futures trading venues approved by the State Council or CSRC. Trades of stock index options are limited to transactions with hedging purposes.
The Announcement was made in accordance with the Measures for the Administration of Domestic Securities and Futures Investment by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors (QFI rules) issued in September 2020 (for more information, you may refer to our previous article here which addresses the key points of the QFI rules), which merged the Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII) regimes. QFII and RQFII have been the major channels for foreign investors to access China securities markets.
Expanding the investment scope for QFI is in line with China’s aims to open up securities and futures markets and attract more foreign investments. Going forward, mainland regulators will continue to evaluate and deepen the opening of capital markets as stated by the CSRC.