Blackrock Fund Advisors has become the first US-based asset manager to be awarded a Renminbi Qualified Foreign Institutional Investor (RQFII) licence, allowing it to invest directly into China’s domestic capital markets.
Some Blackrock funds, including iShares exchange-traded funds (ETFs) will now be able to apply for an investment quota for China A-share stock and onshore bond markets.
HSBC has been appointed to provide onshore custody services for Blackrock Fund Advisors, and, according to the bank, facilitated Blackrock’s application.
The Blackrock licence comes after China allocated the US an RQFII quota of RMB 250 billion in June, the largest quota to be issued to any country aside from Hong Kong.
Ryan Stork, chairman of Blackrock in the Asia Pacific region, said: “As a leader in cross-border investment, we welcome the decision made by the Chinese government to further expand and encourage international investors’ participation in its domestic capital markets.”
“China is an important market for our clients globally and will only grow in importance as it continues to transform and internationalise its capital markets. The ongoing progress helps investors access one of the most important investment destinations in the world. BlackRock supports such progress and looks forward to future developments.”
Pat Burke, president and CEO for HSBC USA, said: “This landmark deal reinforces the strategic importance of US-China commercial relationships as well as the significant strides made in opening China’s capital markets to American investors.”
He added: “HSBC has been at the forefront of the RMB growth story globally, and we believe today’s announcement is a tipping point for increased US-China investment activity.”
Cian Burke, group general manager and global head of securities services for HSBC, said: “The size of the RQFII quota granted to the US in June is further evidence of China’s commitment to accelerating its financial reforms by giving investors greater access to its markets.”
This is the latest in a string of developments for HSBC in supporting US-China investment ties. In 2011, it because the first foreign bank to offer RQFII custody services, and has since become the first custodian bank to offer RQFII services in the UK, France, Korea, Germany, Austria, Switzerland, Canada and Luxembourg.
Earlier this year, it also became the first bank to facilitate access to the China Interbank Bond Market for an overseas institution.
HSBC now offers a range of services for foreign institutional investors in China, including QFII and RQFII custody services, clearing and settlement of securities trading, interbank bond clearing and settlement, and agency and depository services.
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