China has relaxed its laws over qualified foreign institutional investments, as it continues to liberalize its financial markets.
Under tweaked rules released June 12 by the People's Bank of China and the State Administration of Foreign Exchange, or SAFE, the country scrapped the 20% monthly remittance limit under the Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor programs.
Such investors will also be allowed to entrust fund remittances to no more than three custodians and make foreign exchange hedges in China to combat forex risks, though any derivatives exposure should have "reasonable correlation with forex risks related to domestic securities investments."
A three-month capital lock-up period for redemption under the programs has also been removed.
The changes will further facilitate cross-border securities investments, SAFE said.
The QFII program allows authorized foreign investors to invest in China's yuan-denominated capital market and the RQFII scheme allows them to invest with offshore RMB deposits.
