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China mulls lowering threshold for QDII investment

(Xinhua)
Updated: 2007-09-06 16:45

China's securities watchdog is considering lowering the threshold for individuals allowed to invest in banks' qualified domestic institutional investor (QDII) products to 100,000 yuan (US$13,158), according to Thursday's China Securities Journal.

Individuals are currently required to have a minimum of 300,000 yuan to invest.

"The current level, still too high for many domestic investors, will hinder them from enjoying the benefits of investing in overseas stock markets," the newspaper quoted an unidentified source as saying.

Lowering the threshold to 100,000 yuan will help make QDII products more accessible to domestic investors and channel more capital into overseas markets, the source said.

In an effort to curb excessive liquidity, the Chinese government has tried to encourage investment in overseas markets since 1996.

The China Securities Regulatory Commission (CSRC) allows fund management firms with net assets of more than 200 million yuan and more than two years of operational experience, and securities dealers with net assets of more than 800 million yuan and more than one year of investment management operations experience to apply for QDII status.

Last year, the Shanghai-based Hua An Fund Management Co Ltd became China's first fund management firm to be allowed to invest overseas as a pilot QDII, with a quota of US$500 million.

Its first QDII product, launched in November last year, raised US$197 million and yielded five percent over the subsequent six months.

So far, a total of seven funds have gained government approval to conduct QDII business.


(For more biz stories, please visit Industry Updates)



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