China working on QDII2 regulations
To protect interests of small and medium-sized investors.
The China Securities Regulatory Commission and the People’s Bank of China are together formulating regulations governing the planned qualified domestic individual investor program or QDII2.
A specific guideline to stabilize capital flows was issued by China earlier this month and a detailed timetable will be released later.
China earlier announced its support for the pilot program, which will allow individual investors to inject funds into foreign capital markets.
PBOC is allowing Guangzhou and Shenzhen to set up the first QDII2 pilot programs. The government may initially allow individual investors to buy securities listed in Hong Kong, followed by other financial products in the Hong Kong market and, eventually, products in other parts of the world.
"Qualified" domestic individual investors are defined as those having at least three years of experience in stock investment and financial assets equivalent to at least US$244,000.
Only institutional investors can currently invest in overseas capital markets via the qualified domestic institutional investor program, known as QDII1.