Win-win scenario: Acting Financial Secretary Stephen Ip says the QDII expansion is conducive to the development of a mutually supportive, complementary and inter-active relationship between Hong Kong and Mainland financial systems.

Acting Financial Secretary Stephen Ip has hailed the China Banking Regulatory Commission's decision to widen the scope of investment under the Qualified Domestic Institutional Investors scheme.

The commission announced today that Mainland commercial banks offering overseas wealth-management business are allowed to invest in a wider range of asset classes, including equities and equity funds authorised by a supervisory authority with whom the commission has a memorandum of understanding.

When investing in overseas equities on behalf of their clients, Mainland commercial banks must invest in equity markets regulated by a supervisory authority with whom the commission has an MOU. Where an overseas intermediary is appointed as investment manager, it must also be regulated by a supervisory authority who has an MOU with the commission. More details are available here.

"We feel encouraged by the commission's decision to use the Hong Kong market and Hong Kong authorised and regulated financial products and intermediaries to implement it," Mr Ip said.

Orderly outflow 

"The introduction of these measures will facilitate orderly outflow of funds from the Mainland, and fully utilise Hong Kong's advantages as an international financial centre to develop a mutually supportive, complementary and inter-active relationship between the financial systems of the Mainland and Hong Kong," he added.

Monetary Authority Chief Executive Joseph Yam welcomed the move, which represents a clear policy step towards developing a mutually supportive, complementary and inter-active relationship between the financial systems of the Mainland and Hong Kong.

"Through very close supervisory co-operation with the Mainland, Hong Kong provides a robust platform for the orderly outflow of funds from the Mainland and helps ensure that the related investment activities will be conducted in a sound manner.

"The Monetary Authority will continue to support the expansion and development of offshore wealth-management services by banks on the Mainland through the working group and other co-operative arrangements with the commission," Mr Yam added.

More opportunities 

The move will provide Hong Kong banks and the financial industry with increased business opportunities, while enhancing the co-operation and development of the Mainland and Hong Kong financial institutions and contributing to the maintenance of the status of Hong Kong as an international financial centre.

Securities & Futures Commission Chairman Eddy Fong said the move will no doubt result in a win-win scenario for both the Mainland and Hong Kong.

"Mainland investors will be able to enjoy a wider choice of investment products available in Hong Kong, and at the same time benefit Hong Kong's existing asset-management industry," Mr Fong said.

"We will continue to work closely with the Mainland authorities to facilitate the development of the wealth-management business of commercial banks in the Mainland, and to strengthen Hong Kong's role as a platform for Mainland investors to invest in overseas markets."