QFII stands for Qualified Foreign Institutional Investor, which means "Qualified Foreign Institutional Investor". 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 being audited.
This is a transitional system that introduces foreign capital and opens the capital market in a limited way. In some countries and regions, especially emerging market economy countries and regions, because the currency has not been fully convertible and the capital account has not been opened, the intervention of foreign capital may have a greater negative impact on their securities markets. Through QFII system, the management can restrict and guide the entry of foreign capital, make it adapt to the development of domestic economy and securities market, control the influence of foreign capital on the independence of domestic economy, curb the impact of speculative hot money from abroad on domestic economy, promote the internationalization of capital market and promote the healthy development of capital market. This system requires foreign investors to meet certain conditions when entering a country's securities market and obtain the approval of the relevant departments of the country.
The contents of QFII restrictions mainly include qualifications, investment registration, investment quota, investment direction, investment scope, capital inflow and outflow restrictions and so on. This system involves three core contents:
One is the qualification of qualified institutions. Including the number of registered capital, financial status, operating period, whether there are records of violation of discipline and other assessment criteria, in order to select institutional investors with high credit, strong strength and no bad operating records.
The second is to monitor the remittance of funds by qualified institutions. Generally speaking, there are two different means: one is to adopt a compulsory way to stipulate the time and amount of remittance and the funds for remittance; The other is to levy different taxes on capital remittance at different times and amounts through tax means, thus limiting the flow of foreign capital and foreign exchange.
The third is the investment scope and quota limit of qualified institutions. The limitation of investment scope mainly restricts the market types and industries that institutions enter; The investment quota includes two aspects: first, it refers to the amount of funds entering the domestic market and the investment amount of a single investor (sometimes including the minimum investment amount). The second is the proportion of qualified institutions investing in a single stock.
The significance of introducing QFII mechanism is to attract qualified foreign institutional investors to invest in China capital market, and the more direct purpose is to bring a lot of new overseas funds to China capital market and bring vitality to the market.
QFII system 1990 originated in Taiwan Province Province, China. At that time, the purpose of implementing this form was to solve the problem of opening the local securities market to foreign capital under the condition of capital account control. This system has obviously achieved good results in Taiwan Province Province, and has since become an important system adopted by many emerging market countries. On June 5, 2002, 165438+ China's Interim Measures for the Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors was officially promulgated. Since May 2006, nine overseas institutional investors, including Swiss Bank, Nomura Securities, Morgan Stanley, Citigroup Global, Goldman Sachs, Deutsche Bank, HSBC, ing Bank and JPMorgan Chase Bank, have obtained QFII qualification, and the investment quotas of the first eight institutions are 300 million US dollars, 50 million US dollars, 300 million US dollars, 75 million US dollars, 50 million US dollars and 65.438+respectively. Since the Swiss bank took the lead in testing A-shares on July 9, 2006, QFII, like domestic investment funds, has focused on "value investment" and attracted much attention from the market.