China will accelerate approvals of investment quotas for medium- and long-term overseas investment funds under the Qualified Foreign Institutional Investor (QFII) scheme, the country's foreign exchange regulator said on Sunday.
The State Administration of Foreign Exchange (SAFE) will adopt fast-track procedures and allocate more quotas to foreign investors such as pension funds, government-linked funds and insurers, the regulator said in a statement on its website.
The Chinese government has been exploring ways of speeding up the pace of financial reform over the next 12 months with moves that will bring the country closer to the goal of a basically convertible yuan by 2015, sources in contact with the People's Bank of China and the China Securities Regulatory Commission told Reuters last month. Beijing passed a milestone in liberalising its currency regime in April, doubling the daily onshore trading band for the yuan to 1 percent.
The QFII quotas, along with the companion Qualified Domestic Institutional Investor (QDII) scheme that allows domestic institutions to invest overseas, are part of the broader effort to free up capital flows.
The China Securities Regulatory Commission (CSRC) has granted QFII licences to 158 foreign investors since the first ones were handed out in 2003, including to institutions such as American International Assurance Co Ltd, Korea Investment Corp and the Kuwait Investment Authority.