QFII is the abbreviation of Qualified Foreign Institutional Investors in English.

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 currencies, and invest in the local securities market through special accounts under strict supervision and management, including dividends and bid-ask spreads, etc.

Various capital gains within the country can be converted into foreign exchange for remittance after review. In fact, it is a limited opening of the domestic securities market to foreign investment.

According to the "Interim Measures for the Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors" jointly issued by the People's Bank of China and the China Securities Regulatory Commission, the investment scope of QFII includes: A-shares listed and traded on stock exchanges, treasury bonds, convertible bonds, and corporate bonds and other financial instruments approved by the China Securities Regulatory Commission. As a system, it refers to the relevant regulatory authorities in my country that allow approved foreign institutional investors to convert foreign currencies into RMB and invest through special accounts under certain supervision and restrictions. In the local securities market; investors’ capital gains, dividends and other profits can only be remitted out of my country after approval.

As my country's currency market is not yet fully open, QFII, as a transitional, low-risk model, is playing a unique role in the gradual opening of my country's securities market.

In some countries and regions (especially emerging market economies), the currency market has not yet been fully opened, and the capital account has not yet been fully opened. The intervention of foreign capital is likely to have a negative impact on the country's securities market. It can be said that

, it is to prevent such risks that this system came into being.

Through this system, a country's regulatory authorities can implement necessary supervision and guidance on the entry of foreign capital, so that it can adapt to the development of the country's economy and securities market. It can also inhibit the impact of overseas speculative hot money on the economy and promote domestic capital.

Internationalization and healthy development of the market, and protecting the independence of the country’s capital market.

In fact, countries and regions such as Taiwan, South Korea, India, and Brazil established and implemented this system in the 1990s.

my country also promulgated the "Interim Measures for the Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors" in November 2002.

Compared with other countries and regions, the QFII system in mainland my country has been more active and innovative in the design of specific systems, especially in the process of opening up to the outside world, and is more attractive to foreign institutional investors.

my country's QFII system has the following characteristics.

The first is to introduce the leapfrog development of the QFII system in one step.

According to general international experience, the opening of the capital market must go through two stages. In the first stage, you can first establish an "overseas fund" (Taiwan model) or an "open international trust fund" (South Korea model); and this

The stage took Taiwan 7 years and South Korea 11 years.

Our country has bypassed the first stage and achieved it in one step, and the advantages of subsequent development are immeasurable.

Second, the scope of QFII access entities has been expanded and the requirements have been raised.

In order to strengthen supervision and control, countries and regions in emerging capital markets generally clearly stipulate by enumeration what types of foreign institutional investors can enter the country or region. In addition, the amount of registered capital and financial status of QFIIs

, operating period, etc. have relatively strict requirements.

On the contrary, my country has a relatively broad definition of the scope of QFII entities and has given foreign investors more autonomy.

However, in order to ensure the stability and healthy development of the domestic securities market, our country has further improved the requirements for indicators such as the amount of registered capital, financial status, and operating period.