QFll

Qualified Foreign Institutional Investor

QFII (Qualified Foreign Institutional

Investor, Qualified Foreign Institutional Investor) refers to a The qualification recognition system for foreign professional investment institutions to invest in the country when the national currency has not been fully convertible and the capital account has not yet been opened. As a transitional institutional arrangement, the main purpose of this system is to introduce foreign investment and open the capital market. Since foreign institutional investors have potential financial risks, certain restrictions need to be imposed on them. The China Securities Regulatory Commission needs to approve the qualifications of foreign investors, and the State Administration of Foreign Exchange controls the size of foreign investors by issuing quotas and implements quota management. QFII usually includes overseas fund management institutions, securities companies, insurance companies, and other asset management institutions

For example:

From China’s perspective, fund managers that are issued in countries other than China and participate in investments in China’s capital, bond or foreign exchange markets through legal channels are QFIIs issued in China. The fund manager who participates in investing in capital, bond or foreign exchange markets outside China through legal channels is the QDII we mentioned in the previous section

One day, Q from overseas said to D in China that I am a QFII and I want to If you invest in A shares, be my agent. D said: OK. Afterwards, agent D goes to the custodian bank to open a capital account in the name of OFII, and goes to a securities company to open a securities account. When the funds are remitted, the QFII directly remits the funds to the custodian bank, converts them into RMB and then remits them to the opened

Capital account, then, the QFII will notify the agent of the order to buy and sell A-share securities, and the agent will issue the order to buy and sell securities to the securities company. When a QFII wants to remit funds, the custodian bank will transfer them to the QFII's overseas account. This is a general process

QFII and ROFII:

QFII is a qualified foreign institutional investor. Refers to foreign-funded institutions that are approved to raise U.S. dollars and then convert them into RMB for direct investment in A-shares; RQFII is a RMB overseas institutional investor, also known as a small QFII, with a smaller quota than QFII. It is a system for overseas institutions to use RMB for domestic investment, and refers to overseas RMB Invest in A-shares through Chinese securities companies and fund companies in Hong Kong.

Therefore, the main difference between the two is the use of currency