China grants Luxembourg RQFII (RMB Qualified Foreign Institutional Investor) quota

Luxembourg is the leading centre for RMB in Europe and this week even more so as China recently granted a RMB 50 billion RQFII to Luxembourg making Luxembourg the epicentre for RMB business in Europe.

What is RQFII?
RQFII is a policy created by the Chinese government authorities to facilitate foreign investment, securities market and other capital markets in the mainland via offshore RMB accounts. Traditionally it started via Hong Kong, but the Luxembourg market opened in 2011 where the RQFII scheme allows foreign institutions to trade Chinese A-shares and other financial instruments.

Luxembourg is the global hub for cross-border investment funds which offers Chinese asset managers an opportunity to launch and distribute an investment fund product on a cross-border basis, thus further internationalising their RMB. Undertaking for Collective Investment in Transferable Securities (UCITS) and other regulated investment funds are used to assist the transactions.

Asset management licence holders in Luxemburg will now be able to apply for the RWFII licence and quota going through just a few steps:

· China Securities and Regulatory Committee (CSRC) receives the application through a custodian bank in China;

· Once the license is approved (usually after two months), the applicant may apply for the RQFII quota through the State Administration of Foreign Exchange (SAFE);

· People’s Bank of China is responsible for the approvals and supervise RMB accounts together with RQFII cash flows.

Possible outcome/future?

We are at the stage where RMB is becoming more internationalised and Luxembourg is fortunate to have the privilege and be in the position to have the largest number of RMB volume for regulated investments.

Trustconsult Fund Solutions S.A., shall be happy to help you manage your RMB trading project with Raphael Bonfiglioli, Director, Tel : +352661382881, e-mail: Raphael.bonfilgioli@trustconsultgroup.com

Trustconsult Luxembourg S.A., shall be happy to assist with the corporate structuring and administration of your Luxembourg investment vehicles with Fabrice Huberty, CEO, Tel : +352621830.970, e-mail : fabrice.huberty@trustconsultgroup.com.