The Securities and Futures
Commission (SFC), Hong Kong’s financial regulator, has highlighted significant
progress in efforts to offer institutional investors direct access to Chinese
In its latest quarterly
report, the SFC said since the launch of the renminbi qualified foreign
institutional investor (RQFII) scheme, 19 funds had been authorised.
The RQFII scheme allows Hong
Kong subsidiaries of fund managers to use renminbi raised in the region to
participate in Chinese equity and bond markets.
The RQFII scheme was launched
on 16 December in conjunction with the China Securities
Regulatory Commission, People’s Bank of China and the State
Administration of Foreign Exchange.
“The launch of RQFII funds in
Hong Kong is evidence that our partnership with the mainland in pursuit of an
open, robust financial sector can be mutually beneficial,” said Mr Ashley
Alder, the SFC’s chief executive officer.
The SFC’s report also noted
progress on devising a new supervisory regime for Hong Kong’s OTC derivatives
market, inline with reforms agreed among the Group of 20 in 2009.
The SFC worked in conjunction
with the Hong Kong Monetary Authority to launch a public consultation last
October, proposing options for central clearing of OTC trades and reporting
of exposures to trade repositories. However, the SFC and Hong Kong Monetary Authority have not
committed to setting up new trading platforms for OTC derivatives like US and
European reforms under the Dodd-Frank Act and European market infrastructure
“Responses received [to the
OTC derivatives consultation] are being weighed carefully and a conclusion
paper will be published in due course,” read the report. “We plan to conduct
another consultation on the detailed rules of the new OTC derivatives regime in