What does RQFII mean?

RQFII——RMB Overseas Qualified Institutional Investor Method
RQFII

The simple expression is as follows: Due to China’s capital control system, domestic RMB must buy overseas stocks and get QDII. The original foreign currency to buy domestic stocks requires QFII quota.

A more written explanation is that QFII (Qualified Foreign Institutional Investors) is the abbreviation for qualified foreign institutional investors. QFII is allowed to remit and convert a certain amount of foreign exchange funds into RMB, and invest in A shares through a special account, which is actually a foreign investment. Open to a limited extent.

For RQFII, foreign renminbi buys domestic stocks. Hong Kong now has a lot of renminbi, and because the Hong Kong dollar is expected to depreciate, a lot of renminbi is in the bank accounts. RQFII is also called small QFII. RQFII refers to qualified foreign institutional investors who invest in RMB. The liberalization of stock market investment for RQFII is to accelerate the internationalization of the RMB.

There is also a QDII, which is the investment of domestic RMB to foreign products

QDII (“Qualified Domestic Institutional Investor”) is the most well-known. Refers to the establishment of a country within the territory of a country that is not convertible under RMB capital and the capital market is not open. With the approval of the relevant authorities of the country, the control allows domestic institutions to invest in stocks, bonds and other securities in the overseas capital market An institutional arrangement for investment business.

QFII and RQFII are the two main ways for foreign investors to invest in the securities market in my country, and RQFII is also called small QFII. The connection between the two is very close, but they also have many differences. Learn more They will help investors a lot.
The difference between QFII and RQFII

What is the difference between QFII and RQFII?

[1] The funds raised by QFII are foreign exchange, while the funds raised by RQFII are RMB. This is the biggest difference between the two.

[2] QFII is for all qualified overseas institutional investors, while RQFII is for Hong Kong subsidiaries established by domestic fund management companies and securities companies in Hong Kong.

[3] QIFF’s investment scope is RMB financial instruments, and RQFII’s investment scope is extended to the inter-bank bond market on this basis.

[4] RQFII’s investment quota and cross-border fund revenue and expenditure management have been simplified and facilitated on the basis of QFII.

The emergence of RQFII is another innovation in my country’s financial market. It is also an attempt by the management department to further open up my country’s market. In the context of the Global Economic Integration, this is undoubtedly a positive signal and attracts more Foreign investment institutions interested in the market.

Both QFII and RQFII have a relatively long history in China. Since the implementation of the QFII system in 2002 and the implementation of the RQFII system in 2011, more than 400 institutional investors from 31 countries and regions around the world have invested in China’s financial market through this channel. These institutions are The stability of China’s financial market has made an excellent contribution. According to relevant statistics, as of the end of August, a total of 292 institutions have received a total of US$111.376 billion in QFII quotas from the foreign exchange bureau. In addition, 222 institutions have obtained a total of 693.302 billion yuan in RQFII quotas, and Hong Kong, China, occupies half of the country with a total of 345.017 billion yuan.

In fact, whether it is QFII or RQFII, both are channels for foreign institutions to exchange RMB and then invest in A shares. The specific difference is the location of the foreign institution.