Individual PRC investors will soon have access, through wealth management products offered and managed by qualified domestic institutional investor banks and most other types of qualified domestic institutional investors (“QDIIs”), to indirect pooled investment in overseas-listed shares and mutual funds, structured products issued by overseas financial institutions and small quantities of swaps, futures and derivatives.
An individual or institutional investor will also have the option of making unpooled investments of a narrower scope through a trust company, being the newest permitted form of QDII.
QDIIs will enjoy broader opportunities in outbound portfolio investments, will need to procure and provide broader services, and will need to comply with more complex regulations. These opportunities and challenges will also indirectly affect foreign financial institutions, and directly affect domestic investors.
There is now renewed activity and momentum in PRC regulatory development, after a lull since the issuance of key documents in April 2006 by the People’s Bank of China and other concerned government departments. Since then, banks, insurers, mutual funds and securities institutions have all been permitted to qualify as QDIIs, but only banks have been able to refer to published supporting measures.