The normalization of QDII quota is conducive to the two-way opening of financial market

 The normalization of QDII quota is conducive to the two-way opening of financial market

What is QDII

QDII is a transitional institutional arrangement for conditional and limited opening of overseas securities investment of domestic institutions under the condition that the capital account has not yet been opened. It is an important mechanism for the two-way opening of Chinas capital market. To a certain extent, QDII meets the needs of domestic investors to invest abroad and allocate overseas assets. At the same time, it provides a platform and accumulates experience for domestic institutions to expand their international business.

The QDII system began in 2006. The competent departments such as the CSRC and the CIRC are responsible for the qualification approval. The safe is responsible for the supervision, management and inspection of the investment quota, capital account, fund receipt and payment and exchange of QDII institutions.

Since the implementation of QDII system, it has played an active role in promoting the opening of Chinas financial market, broadening investment channels for domestic residents and cultivating domestic financial system. At the same time, the QDII system can better prevent the risk of overseas investment of domestic entities, and the cross-border capital flow is relatively stable and orderly.

Normalization of QDII quota issuance

The safe has previously issued two rounds of QDII quota, totaling US $8.42 billion to 52 institutions (US $3.36 billion in September and US $5.06 billion in early November). Yesterday, safe issued another QDII quota of US $4.296 billion to 23 institutions. So far, 169 QDII institutions have obtained an investment quota of 116.699 billion US dollars.

The continuous issuance of QDII quota by safe confirms the previous statement of safe on the normalization of QDII quota, which will further promote the two-way institutional opening of financial market.

In addition, under the guidance of promoting the formation of a new development pattern, the reform in various fields has been further promoted. The launch of QDII quota by the safe will help to build a new situation of two-way financial opening up, and further demonstrate Chinas firm determination and confidence in achieving stable economic growth and coping with complex external changes.

Therefore, at present, we can appropriately promote the opening of the outflow financial market and orderly dredge the overseas asset allocation demand of domestic entities.

The overall impact is controllable

At present, the impact on domestic capital market, cross-border capital flow and RMB exchange rate after the launch of the third round of QDII quota issuance by safe since this year is generally controllable, because the cross-border capital flow under QDII is relatively stable and limited in scale in recent years.

Although the quota of QDII institutions has increased this time, the global political economy is still facing great uncertainty. The slowdown of global economic growth may be further sustained, and the fluctuation of international financial market may also rise further, which objectively puts forward higher requirements for the management ability and risk management level of overseas financial investment of domestic investors.

Therefore, QDII institutions should carry out overseas investment business in an orderly manner, make prudent business decisions, promote diversified distribution of products and investment directions, continuously optimize the allocation of overseas assets, and effectively control the risk of overseas investment.

Source: Ren Hui, editor in charge of Shanghai Securities News_ NBJ9607