The Measures for the Pilot Scheme of Securities Investments in China Made by the RMB
Qualified Foreign Institutional Investors
Article 1 The Measures are drafted pursuant to relevant laws and administrative regulations in
order to regulate securities investments in China made by RMB qualified foreign institutional
investors, facilitate the development of the securities market and protect the lawful rights and
interests of investors.
Article 2 For the purposes of the Measures, the term “RMB qualified foreign institutional investor”
(hereinafter referred to as the RQFII) refers to any foreign legal entity which, after being approved
by the China Securities Regulatory Commission (hereinafter referred to as the CSRC) and granted
an investment quota by the State Administration of Foreign Exchange (hereinafter referred to as
the SAFE), uses overseas RMB funds to make securities investments in China.
Article 3 Securities investments made by the RQFIIs within China shall be subject to regulation
by the CSRC under the law. The People’s Bank of China (hereinafter referred to as the People’s
Bank) shall administer the establishment of RMB bank accounts by the RQFIIs in China in
accordance with the law. The SAFE shall administer the investment quotas of the RQFIIs. The
People’s Bank shall work with the SAFE to monitor and administer the inflow and outflow of the
RQFIIs’ funds.
Article 4 When making securities investments within China, the RQFIIs shall engage a domestic
commercial bank with the qualification to serve as a custodian for qualified foreign institutional
investors to be responsible for the custody of assets and a domestic securities company to trade
securities on their behalf.
The RQFIIs may engage a domestic asset management institution to manage their securities
investments within China.
Article 5 No RQFII status shall be granted to any applicant unless the applicant satisfies the
following requirements:
1) It is financially sound, has good credit standing and complies with the rules of the CSRC in
terms of place of registration, business qualification and other matters;
2) It has effective corporate governance and internal control and is staffed with practitioners who
meet relevant practice qualification requirement of the country or region in which they reside;
3) It carries on business in accordance with applicable laws and regulations and has not received
any major penalty by local regulatory bodies in the past three years or since its establishment; and
4) It meets any other requirements specified by the CSRC in accordance with the principle of
prudent supervision.
Article 6 The CSRC shall be responsible for the examination and approval of applications of
RQFIIs for qualifications to make securities investments in China and shall, within 60 days of
receipt of the complete application documents, make a decision of approval or disapproval. The
CSRC shall give a written approval and issue the securities investment license to the applicant in
the case of the decision of approval and shall give a written notice to the applicant in the case of
the decision of disapproval.
Article 7 The RQFII with the qualification to make securities investments within China shall
submit the following materials to the SAFE to apply for investment quota:
1) An application report, including the basic information of the applicant, statement on source of
funds, plan for making securities investments in China, etc.
2) A copy of securities investment license issued by the CSRC;
3) A notarized letter of authorization issued to a custodian within China; and
4) Other materials required by the SAFE.
The SAFE shall, within 60 days of receipt of the complete application documents of the RQFII,
make a decision of approval or disapproval. The SAFE shall give a written approval and issue the
registration certificate to the applicant in the case of the decision of approval and shall give a
written notice to the applicant in the case of the decision of disapproval.
Article 8 The RQFII’s custodian in China shall perform the duties:
1) to keep all assets the RQFII has placed under its custody;
2) to monitor the securities investment operations of the RQFII in China;
3) to handles such processes as inflow and outflow of the RQFII’s funds ;
4) to report the balance of payments statistics as required under the applicable rules;
5) to submit relevant business reports and statements to the CSRC, the People’s Bank and the
SAFE; and
6) to fulfill other duties prescribed by the CSRC, the People’s Bank and the SAFE in accordance
with the principle of prudent supervision.
Article 9 The RQFIIs shall observe relevant supervisory requirements when making investments
into RMB financial instruments within the approved investment quota. In line with
macro-administration requirements and the development of the pilot scheme, the CSRC and the
People’s Bank may establish specific rules for and make adjustments to the general investment
proportion and products.
The RQFIIs shall observe relevant rules of the People’s Bank when making investments in the
inter-bank bonds market.
Article 10 When making securities investments in China under the pilot scheme, the RQFIIs shall
observe the provisions of Chinese laws and regulations on shareholding ratio and information
disclosure and other matters and the requirements of other relevant supervisory rules.
The RQFIIs shall, in accordance with the rules of the People’s Bank, report information including
the inflow and outflow of RMB funds to the RMB Cross-border Payment & Receipt Management
Information System of the People’s Bank via their domestic custodians.
Article 11 The RQFIIs shall arrange the inflow and outflow of funds in compliance with relevant
requirements on investment quota administration.
The RQFIIs may remit the principal and the investment income out of China in RMB or a foreign
currency.
Article 12 The CSRC, the People’s Bank and the SAFE may, in compliance with the law, require
the RQFIIs, domestic custodians, securities companies and other institutions to provide
information on the RQFIIs and conduct necessary inquiry and inspection.
Article 13 Where the RQFII falls under any of the following situations, the RQFII shall report it to
the CSRC, the People’s Bank and the SAFE within 5 working days:
1) A change in its domestic custodian;
2) A change in its principal responsible person;
3) Any adjustment to its equity structure;
4) Any adjustment to its registered capital;
5) A merger with another institution as the merging party;
6) Involvement in any major lawsuits and other significant events;
7) Imposition of any major penalty overseas; or
8) Other situations prescribed by the CSRC, the People’s Bank and the SAFE.
Article 14 Where the RQFII falls under any of the following situations, the RQFII shall reapply
for the securities investment license:
1) A change its name;
2) A merger with another institution as the merged party; or
3) Other situations specified by the CSRC and the SAFE.
While reapplying for the securities investment license, the RQFII may continue to make in
securities investments, unless the CSRC deems it necessary to suspend such investments in
accordance with the principle of prudent supervision.
Article 15 Where the RQFII falls under any of the following situations, the RQFII shall return the
securities investment license and the foreign exchange registration certificate to the issuing
authorities:
1) Where it fails to apply to the SAFE for investment quota within one year after obtaining the
securities investment license;
2) Where it dissolves, start bankruptcy proceedings or is taken over by a receiver; or
3) Other situations determined by the CSRC, the People’s Bank and the SAFE.
Article 16 Where any violation of laws and regulations is committed when the RQFII and its
domestic custodian make securities investments in China under the pilot scheme, corresponding
regulatory measures and administrative punishment adopted by the CSRC, the People’s Bank and
the SAFE may, pursuant to the law, subject them to corresponding regulatory measures and
administrative penalties.
Article 17 The Measures shall come into effect on the day of the promulgation and the Measures
for the Pilot Scheme of Securities Investments in China Made by the RMB Qualified Foreign
Institutional Investors of Fund Management Companies and Securities Companies issued on
December 16 2011 shall be abolished on the same day.