The Next Step for Offshore RMB: The RMB Qualified Foreign Institutional Investor Scheme

January 06, 2012
The Renminbi Qualified Foreign Institutional Investor Scheme was launched in the People’s Republic of China in December. It is an extension of the existing US Dollar-denominated Qualified Foreign Institutional Investor program that permits approved foreign institutional investors to invest in the A Share market, and allows Chinese financial firms, indirectly through their Hong Kong-incorporated subsidiaries, to apply for RQFII licenses and quotas to utilize RMB funds raised in Hong Kong for the purposes of investing in the PRC securities market. In this update, we examine the Scheme and its implications.