Markets International Markets. QDII A qualified domestic institutional investor or QDII is an institutional investor that has met certain qualifications to invest in securities outside of their home country. Key Takeaways A qualified domestic institutional investor QDII is an institutional investor that meets qualifications to invest in securities in foreign markets.
QDII programs started in China in and allow five types of Chinese entities to invest abroad: insurance companies, banks, trust companies, funds, and securities firms. Entities that want to participate in the QDII program must first receive approval from China's State Administration of Foreign Exchange SAFE , which is also responsible for establishing the investment quota amount allowed each participant.
Once approved, entities are allowed to make investments in the overseas markets for both themselves or on behalf of retail clients. Firms can make investments in equities, fixed income, and derivatives in specified overseas markets. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Foreign Invested Enterprise FIE A foreign invested enterprise FIE is any one of a number of legal structures under which a company can participate in a foreign economy.
What Are B-Shares? B-shares are equity share investments in companies based in China. They trade in foreign currency on two different Chinese exchanges, either U. Qualified Institutional Buyer QIB A qualified institutional buyer QIB is a type of investor that is assumed to be a sophisticated investor and in little need of regulatory protection.
Partner Links. Related Articles. The Qualified Foreign Institutional Investor QFII scheme is a transitional arrangement which allows institutional investors who meet certain requirements to invest in the PRC equities and bonds markets. In particular, the reforms have centred around an increasing relaxation of the restrictions on eligibility, quotas, investment options and the remittance of funds.
In order to attract more overseas capital investment, and boost and internationalise its domestic securities and futures market, Chinese authorities are working on a series of measures to reform the QFII and RQFII schemes.
Such proposals, if officially implemented, will open a new horizon for private fund managers " PFMs " to raise capital from foreign investors. The new rules were now issued and will take effect from 1 November Stock Connect was launched as a mutual market access programme between Hong Kong and Shanghai in , and as a mutual market access programme between Hong Kong and Shenzhen in Stock Connect enables both Northbound trading and Southbound trading. At inception, Stock Connect only encompasses secondary market trading; primary market activities such as initial public offerings are not supported.
There are two routes for international investors to gain access to CIBM: the first one is known as CIBM Direct, under which route foreign central banks, international financial organizations and sovereign wealth funds can purchase bonds and engage in bond lending, bond forwards, interest rate swaps, forward rate agreements and bond repos; the second one is known as Bond Connect, which is a mutual market access scheme that allows foreign investors to trade bonds in the CIBM through an international electronic platform i.
It is also conducive for meeting domestic investors' needs for diversifying overseas asset allocation," a SAFE official was quoted as saying in the statement. The official also noted that it provides a chance for domestic financial institutions to improve their overseas investment capacity, and it will promote further development of the cross-border asset management industry. The SAFE official suggested that QDII institutions should conduct overseas investment business in an orderly manner, as the uncertainty of the global political environment is rising in the post-virus era, and the global financial market could also be subject to greater fluctuations.
Global Times.
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