ICI Urges China's Regulators to Open Securities Markets to All Investors

Washington, DC, October 8, 2003 - The Institute strongly supports China's efforts to open its domestic securities markets to qualified foreign investors, and has encouraged Chinese regulators to continue to take steps to provide all investors, foreign and domestic, full and equal access to the Chinese securities markets.

Background
Late last year, China adopted a qualified foreign institutional investor (QFII) regime that allowed foreign investors access to China's A-share market for the first time. China's Securities Regulatory Commission (CSRC), State Administration of Foreign Exchange (SAFE), and two main stock exchanges adopted implementing rules that took effect on December 1, 2000. The implementing rules contain a number of requirements that make the QFII regime less attractive to certain types of foreign institutional investors, such as U.S. mutual funds. As a result, few firms have applied for QFII licenses.

ICI Position
In a comment letter, the Institute encourages China to view the QFII system as transitional, and to follow the example of other markets-Taiwan, Korea, and India-that have progressively liberalized and eventually abolished their QFII systems. The Institute notes that all investors eventually should be allowed full and equal access to the Chinese securities markets.

In its letter, the Institute makes specific recommendations in six areas:

Related Links

In addition, a section of this website is devoted to the Institute's work with representatives of foreign nations and U.S. government officials to seek legislative and regulatory improvements that enhance both the competitiveness of U.S. money management firms abroad and the level of service to investors in foreign markets.