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Nation to loosen restrictions on QDII overseas investment

(Xinhua)
Updated: 2007-04-02 09:13

皇冠体育app plans to loosen restrictions on qualified domestic institutional investor (QDII) investment targets so that they can invest in new sectors, said Li Dongrong, vice director of the State Administration of Foreign Exchange (SAFE) last Thursday.

Li made the remarks at the 2007 皇冠体育app Derivatives Summit. He said that together with the 皇冠体育app Banking Regulatory Commission and the 皇冠体育app Insurance Regulatory Commission, SAFE is mulling over the selection of potentially profitable new sectors.

SAFE is also considering including securities companies in the QDII system.

QDIIs are currently allowed to invest only in fixed-return financial products.

皇冠体育app's QDII program is still in its infancy and the products are not selling well because of the narrow investment scope, high risks, low profits and poor accessibility, he said.

Furthermore, investors - both companies and individuals - would rather hold renminbi than convert them into foreign currency because the yuan keeps on appreciating.

皇冠体育app launched the QDII system in July 2006, allowing QDIIs to raise renminbi funds from domestic individuals and institutions and buy foreign currency from SAFE for overseas investment.

So far, 30 financial institutions - 11 domestic banks, seven foreign banks, 11 insurance companies and one mutual fund - have been granted QDII status.