Qualified Domestic Institutional Investor

Qualified Domestic Institutional Investor, also known as QDII, is a scheme relating to the capital market set up to allow financial institutions to invest in offshore markets such as securities and bonds. Similar to QFII (Qualified Foreign Institutional Investor), it is a transitional arrangement which provides limited opportunities for domestic investors to access foreign markets at a stage where a country/territory’s currency is not traded or floated completely freely and where capital is not able to move completely freely in and out of the country.

QDII in China

In People’s Republic of China, QDII allows investors to invest in foreign securities markets via certain fund management institutions, insurance companies, securities companies and other assets management institutions which have been approved by China Securities Regulatory Commission ("CSRC").

On 13 April 2006, the Chinese government announced the QDII scheme, allowing Chinese institutions and residents to entrust Chinese commercial banks to invest in financial products overseas. But the investment was limited to fixed-income and money market products.

After granting 15 banks and funds a total quota of US$14.2 billion to invest overseas, the Chinese government announced on 11 May 2007 to widen the scope of the QDII investment. With certain restriction, banks can now offer stocks related products. The net value of a QDII product investing in stocks must not exceed 50%, with the net value represented by a single stock capped at 5%. The minimum commitment by each client is 300,000 yuan. Also, the stocks invested or the fund linked must be listed on or approved by the area that have signed memorandums of understanding with the CSRC.

In November 2007, Premier Wen Jiabao stated the need to further study the scheme for individual Mainland Chinese residents to invest in stocks in Hong Kong. See [http://www.news.gov.hk/en/category/businessandfinance/071103/html/071103en03004.htm Through train scheme to be discussed] . See also [http://www.rthk.org.hk/rthk/news/englishnews/20071103/news_20071103_56_443951.htm Premier says caution necessary before opening floodgates to Hong Kong shares] .

On April 8, 2008, an agreement between the China Banking Regulatory Commission and the US Securities and Exchange Committee made it possible for Chinese individuals to invest in the US stock market. [cite web
url=http://www.atimes.com/atimes/China_Business/JD10Cb01.html
date = April 10, 2008
title= US stocks open to China savers
publisher= Asia Times Online
accessdate=2008-04-23
last= Komaiko
first= Richard]

Notes

ee also

*Qualified Foreign Institutional Investor
*China Securities Regulatory Commission

External links

* [http://www.aureichina.co.uk/ Aurei China Investment Consultants Ltd]
* [http://www.csrc.gov.cn/ China Securities Regulatory Commission 中国证券监督管理委员会 website]