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 markets.
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 regulation respectively.
“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 2012.”