Chinese funds, brokers can now buy HK shares

Chinese funds, brokers can now buy HK shares

BEIJING - CHINA'S securities regulator said yesterday it would allow mutual funds and securities firms to invest in Hong Kong equities for the first time under the Qualified Domestic Institutional Investor (QDII) scheme.

The move, announced on the China Securities Regulatory Commission (CSRC) website, comes weeks after the banking regulator permitted Chinese banks to do the same.

The CSRC statement listed a range of permitted investments, including equities, in those jurisdictions whose supervisory authorities have signed a memorandum of understanding with their Chinese counterparts.

In the case of banks, only Hong Kong meets this requirement for now.

It was not immediately clear whether the CSRC has signed agreements with securities supervisors elsewhere.

Since the QDII scheme was launched in April last year as a way of spurring capital outflows and trimming the country's balance-of-payments surplus, banks and fund managers have been restricted to investing in overseas fixed-income and money market products on behalf of clients.

REUTERS