But at the same time, between the two systems, Qualified Foreign Institutional Investors (QFII) and qualified domestic institutional investor (QDII) are both institutional arrangements to control domestic and overseas securities investment under the condition that RMB capital is not freely convertible.
1.QDII and QFII. QDII is qualified domestic institutional investor, and its English name is Qualified Domestic Institutional Investor. It is a related securities investment fund established in a country and approved by the relevant departments of that country to engage in securities business such as stocks and bonds in overseas securities markets. It refers to a transitional institutional arrangement that allows domestic investors to invest in overseas securities markets to a limited extent when the currency is not fully convertible and the capital account is not yet open.
Two. QFII, that is, the mechanism of foreign institutional investors, is called qualified foreign institutional investors in English, and the qualified foreign institutional investor system refers to the qualified foreign investor system. 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. QFII fund refers to an investment method in which qualified foreign investors convert their local currency into RMB to invest in A-shares by setting up a fund, and return the capital gains and expected dividends gained from the investment to the host country when they withdraw.
3.QFII funds are for overseas qualified investors and QDII funds are for domestic qualified investors. The investment scope is different. QFII fund is a qualified foreign investor who invests in stocks, bonds and other investment products recognized by the domestic securities regulatory commission, while QDII fund is a qualified domestic investor who invests in the international market. The scope of the two is completely inconsistent. The settlement method is different. QFII funds convert foreign currencies into RMB, which is denominated in RMB, while QDII funds convert RMB into foreign currencies, which is denominated in foreign currencies. For example, those who invest in US stocks are denominated in US dollars, and those who invest in European stock markets are denominated in euros. Laws and regulations are different. In the process of investment, QFII funds are regulated by relevant domestic laws and regulations, and QDII funds are also regulated by relevant laws and regulations of investment areas.