QFII system, as a transitional institutional arrangement, is a special channel to realize the orderly and steady opening of the securities market in countries and regions where the capital account has not been fully opened. The experience of markets including South Korea, Taiwan Province Province, India and Brazil shows that QFII is a steady way to introduce foreign capital through the capital market when the currency is not freely convertible.
Under this system, 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 a special account 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.
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.
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Institutional characteristics
The first is the leap-forward development of introducing QFII system in one step. According to general international experience, the opening of the capital market will go through two stages. In the first stage, an "overseas fund" (Taiwan Province model) or an "open international trust fund" (Korean model) can be established first.
At this stage, Taiwan Province Province spent 7 years, and Korea 1 1 year. China bypassed the first stage, one step in place, and its advantage as a latecomer is immeasurable.
The second is to expand the scope of QFII access and raise the requirements. In order to strengthen supervision, countries and regions in emerging capital markets generally stipulate what types of foreign institutional investors can enter their own countries or regions through listing. In addition, there are strict requirements on QFII's registered capital, financial status and operating period.
On the contrary, China's determination of the scope of QFII is relatively broad, giving foreign investors more autonomy. However, in order to ensure the stable and healthy development of the domestic securities market, China has further raised the requirements for the amount of registered capital, financial status, operating period and other indicators.
Third, with the rapid appreciation of RMB, QFII is ready to move. QFII has undoubtedly become the main force with the most ideas and financial strength in the A-share market. Locking in the varieties that QFII will inevitably add positions in the next stage is an inevitable choice to capture the dark horse at the bottom. QFII is becoming an important force to promote the development of A-share market.
According to the latest data of the 2007 National Securities and Futures Regulatory Conference, by the end of 2006, the total market value of A shares held by 52 QFII had reached 9765438+ billion yuan, accounting for 3.88% of the total market value of the Shanghai and Shenzhen stock markets at the end of 2006, making them the second largest institutional investors in the A-share market after funds.
Baidu encyclopedia -QFII