Qualified Domestic Institutional Investor - QDII


DEFINITION of 'Qualified Domestic Institutional Investor - QDII'

An institutional investor that has met certain qualifications to invest in securities outside its home country. The most popular QDII program comes from the People's Republic of China, where the main regulatory body (the China Securities Regulatory Commission) may grant a limited avenue for institutional investors such as banks, funds and investment companies to invest in foreign-based securities.

The overall restrictions on ownership are in place for several reasons, including currency conversion concerns in nations where the currency is not free-floating.

BREAKING DOWN 'Qualified Domestic Institutional Investor - QDII'

QDII programs are used in places where the capital markets are not yet completely open to all investors. For example, any institutional investor in China that obtains approval to be a QDII may invest up to 50% of net assets into allowable foreign securities, so long as not more than 5% is invested in any one security. Only certain foreign markets are eligible for investment, including Britain and Hong Kong.

The QDII program in China was set up partly to provide the growing number of domestic investors with a place to park their funds; only a few hundred local stocks are listed on the Shanghai and Shenzhen stock exchanges.

  1. Foreign Invested Enterprise - FIE

    Any one of a number of legal structures under which a company ...
  2. China Securities Regulatory Commission ...

    The main securities regulatory body in China, which was created ...
  3. Foreign Institutional Investor ...

    An investor or investment fund that is from or registered in ...
  4. A-Shares

    Shares in mainland China-based companies that trade on Chinese ...
  5. China Investment Corporation - ...

    A government-sponsored entity of the People's Republic of China ...
  6. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock ...
Related Articles
  1. Investing Basics

    Investing In China

    Investment opportunity is huge in China. However, investors should consider the pitfalls, understand the risks and rewards, focus on shareholder-friendly companies and stick to investments they ...
  2. Mutual Funds & ETFs

    Top 3 Japanese Bond ETFs

    Learn about the top three exchange-traded funds (ETFs) that invest in sovereign and corporate bonds issued by developed countries, including Japan.
  3. Investing Basics

    3 Key Signs Of A Market Top

    When stocks rise or fall, the financial fate of investors change, as well. There are certain signs that can reveal a stock’s course, and investors don’t need to be experts to spot them.
  4. Investing

    Asset Manager Ethics: Rules Governing Capital Markets

    The integrity of the capital markets needs to be kept at utmost importance for all investors. This article shows how to maintain the integrity while investing.
  5. Mutual Funds & ETFs

    Top 3 German Bonds ETFs

    Learn about the top three exchange-traded funds (ETFs) that invest in sovereign and private bonds issued by Germany with different duration yields.
  6. Economics

    A Long Road to Full Diplomatic Relations with Cuba

    Over the past 50 years, the U.S. and Cuba have remained at odds, only recently to restore diplomatic ties. What does this mean?
  7. Economics

    How US Interest Rates Move the World Economy

    Because the US has the world's largest economy, fluctuations in America's interest rates affect much more than domestic growth
  8. Investing Basics

    What is the Sensex?

    The Sensex is the benchmark index for the Bombay Stock Exchange in India.
  9. Investing News

    Understand the SEC Rules on Equity Crowdfunding

    The SEC's adoption of equity crowdfunding rules, initiated under the JOBS Act, enables small investors to invest in companies that show early potential.
  10. Investing

    How Shackling Offshore Banks Will Impact You

    FATCA regulations have cast a wide net on offshore banking activities, and many innocent account holders might get caught in its tangle.
  1. What's the difference between institutional and non-institutional investors?

    There are a number of differences between institutional investors and non-institutional investors. If you are considering ... Read Full Answer >>
  2. I live in the U.S. How can I trade stocks in China and India?

    Foreign markets have always been an object of envy to domestic investors because the indexes in some foreign countries have ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. What is the difference between a greenfield investment and a regular investment?

    A greenfield investment is a particular type of investment where an international company begins a new operation in a foreign ... Read Full Answer >>
  5. What are the benefits for a company investing in a greenfield investment?

    Advantages of greenfield investments include increased control, the ability to form marketing partnerships and the avoidance ... Read Full Answer >>
  6. Why did China designated certain territories as special administrative regions?

    The primary reason for the People's Republic of China designating two territories as special administrative regions, or SARs, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  2. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  3. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  4. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  5. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  6. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!