2.QFII is a transitional system for a country to introduce foreign capital and open its capital market to a limited extent when its currency is not fully convertible and its capital account is not yet open. This system requires foreign investors to meet certain conditions if they want to enter a country's securities market, remit a certain amount of foreign exchange funds after approval by the relevant departments of the country, and convert them into local currency through a special account under strict supervision to invest in the local securities market.
First, QFII
1, QFII is short for qualified foreign institutional investors. Under the QFII system, qualified foreign institutional investors (QFII) will be allowed to remit a certain amount of foreign exchange funds and convert them into local currency, and invest in the local securities market through special accounts under strict supervision and management. All kinds of capital gains, including dividends, bid-ask spreads, etc., can be converted into foreign exchange for remittance after examination, which is actually a limited opening of the domestic securities market to foreign investors.
2. According to the Interim Measures for the Administration of Domestic Securities Investment of Qualified Foreign Institutional Investors jointly issued by the People's Bank of China and the China Securities Regulatory Commission, QFII's investment scope includes: A-share stocks, government bonds, convertible bonds, corporate bonds and other financial instruments approved by the China Securities Regulatory Commission.
3.QFII system refers to an open market model that allows qualified foreign institutional investors to remit a certain amount of foreign exchange funds under certain regulations and restrictions, and convert them into local currency, and invest in the local securities market through special accounts under strict supervision, and their capital gains and dividends can be converted into foreign exchange remittance after approval. As a transitional arrangement to introduce foreign capital and open the capital market, QFII's fundamental purpose is to attract foreign capital into the domestic capital market. Allowing foreign investors to directly invest in domestic securities, especially when China's capital account is not fully open and the currency is not fully convertible, allowing some foreign institutional investors with high qualifications and strength and no bad records to enter China's capital market and introducing foreign capital to open the capital market to a limited extent will undoubtedly help to establish a market atmosphere of value investment and rational investment, create conditions for the final full opening of China's capital market, and gain good experience.