Qualified Foreign Institutional Investor - QFII

Dictionary Says

Definition of 'Qualified Foreign Institutional Investor - QFII'


A program that permits certain licensed international investors to participate in China's mainland stock exchanges. The Qualified Foreign Institutional Investor program was launched by the People's Republic of China in 2002 to allow foreign investors access to its stock exchanges in Shanghai and Shenzhen. Prior to QFII, foreign investors were not able to buy or sell shares on China's stock exchanges because of China's tight capital controls. With the launch of the QFII program, licensed investors can buy and sell yuan-denominated "A" shares. Foreign access to these shares is limited by specified quotas that determine the amount of money that the licensed foreign investors are permitted to invest in China's capital markets.

Investopedia Says

Investopedia explains 'Qualified Foreign Institutional Investor - QFII'


As of April, 2012, the combined quota for the Qualified Foreign Institutional Investor program was set at U.S. $80 billion. The quotas are granted by SAFE - China's State Administration of Foreign Exchange, and the quotas can be adjusted to reflect and respond to the country's economic and financial situation. Type of investments include listed stocks (excluding foreign-oriented, or "B" shares); Treasury bonds, corporate debentures and convertible bonds, and other financial instruments approved by the China Securities Regulatory Commission (CSRC). To be approved as a licensed investor, certain qualifications must be met (qualifications are dependent upon the type of investor - such as fund management companies and insurance companies). For example, fund management companies are required to have a minimum of five years of experience in assets management and must have managed at least U.S. $5 billion in securities assets in the most recent accounting year. A specified amount of foreign currency, transferred and converted to local currency, is also required for approval.
comments powered by Disqus
Hot Definitions
  1. Closed-End Fund

    A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
  2. Payday Loan

    A type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash.
  3. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  4. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  5. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
  6. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
Trading Center