Chinese authorities have allowed Ucits and alternative funds in Ireland to apply for permission to invest in renminbi securities.
The permission comes after the People’s Bank of China granted Ireland a 50 billion renminbi (€7 billion) quota under the renminbi qualified foreign institutional investors (RQFII) regime.
Investment managers in a jurisdiction with an RQFII quota can apply to the Chinese authorities for a portion of that quota.
Grainne McEvoy, acting director of securities and markets supervision at the Central Bank of Ireland (CBI), said: “This initiative will increase the range of options available to Irish domiciled investment managers and no doubt contribute to the furthering of supervisory cooperation between the Central Bank and the People’s Bank of China.”
Pat Lardner, chief executive of trade association Irish Funds, said the permission recognised Ireland’s position as a leading cross-border funds centre.
He added that the RQFII permission came soon after confirmation that the CBI can accept applications from Irish Ucits and regulated alternative investment funds to invest in Chinese securities through the Shenzhen-Hong Kong Stock Connect programme.
Lardner also said the development would benefit Ireland’s exchange-traded funds industry in advance of “possible index inclusions for Chinese shares”.
Last year, Ireland was granted access to Hong-Kong-Shanghai Stock Connect programme. The two stock connect programmes facilitate cross-border investment between China’s two mainland cities and Hong Kong.
Lardner says all these permissions will attract both Chinese and international managers to establish funds in Ireland for their underlying investors who want China exposure.
“As the home of 4.9% of global fund assets and 14.6% of European fund assets, Ireland will continue to provide vital connections between managers and investors from around the globe,” he said.
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