Irish funds get enhanced access to Chinese markets via RQFII and Stock Connect

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Irish funds get enhanced access to Chinese markets via RQFII and Stock Connect

Irish Funds, the representative body for the cross-border investment funds industry in Ireland, has welcomed the announcement by the People’s Bank of China and the Irish authorities that Ireland has been granted a RMB 50 billion quota under the RQFII1 Scheme.

This important announcement recognises Ireland’s position as a leading cross-border funds centre and comes very quickly after confirmation that the Central Bank of Ireland is in a position to accept applications from Irish domiciled UCITS and AIFs to invest through the Shenzhen-Hong Kong Stock Connect (“Shenzhen Connect”) programme.

These are strategically important and timely developments given the growing relevance of holdings in Chinese securities by global fund managers.  Ireland’s position as the third largest global funds centre2 and as the European location of choice for ETFs will also be bolstered by the announcement in advance of possible index inclusions for Chinese shares.

Eligible investors will be granted licenses as part of the RQFII quota set at RMB 50 billion (approximately €7bn at current exchange rates), which will allow Irish domiciled funds to purchase securities in local Chinese Markets.

Further enhancing Irish funds’ ability to access Chinese mainland markets, the Central Bank have also advised that they will now begin accepting applications for investment through Shenzhen Connect. This is the latest addition to the existing Hong-Kong-Shanghai Stock Connect which Irish funds were granted access to in 2015.

These developments will attract both Chinese and international managers to establish funds in Ireland to provide investment access the Chinese market for global investors. They also mark a strengthening of the financial services links between Ireland and China.

 

Pat Lardner, Chief Executive of Irish Funds stated: “We are delighted the RQFII Quota has been granted - it is testament to the hard work of both the Chinese and Irish authorities and something we have been strong advocates for on behalf of our members. We believe that multiple access points to the Chinese securities markets via RQFII and Stock Connect provide a range of options for the hundreds of investment managers who already use Ireland and the many more we believe will.  As the home of 4.9% of Global fund assets and 14.6% of European fund assets Ireland will continue to provide vital connections between managers and investors from around the globe.

Article Published: 21/12/2016