Safe breaks QFII record with $1bn quota to SWF

China’s foreign exchange regulator has smashed its record high for a single QFII quota as part of a fresh batch of awards amounting to almost $2.5 billion.

The State Administration of Foreign Exchange (Safe) has handed $1 billion to Qatar Holding, a subsidiary of sovereign wealth fund QIA, to invest in China’s domestic securities market.

Prior to this award, announced on its website yesterday, the highest mark was $700 million granted to both the Hong Kong Monetary Authority (HKMA) and Temasek Fullerton Alpha in July and October this year, respectively.

However, AsianInvestor has previously quoted an official from the China Securities Regulatory Commission (CSRC) as confirming that Qatar Investment Authority had applied for $5 billion in quota. So while this is a landmark for QIA, it has only received 20% of what it was after.

Last month the official confirmed that the CSRC was considering increasing its $1 billion cap for QFII quotas to cater to the needs of long-term offshore investors. QIA had been tipped to be the first one to obtain more than the cap.

At present, the Government of Singapore Investment Corporation, HKMA and Norway’s Norges Bank have all been awarded a total of $1 billion in QFII quotas via several applications.

In its latest batch of quotas, announced yesterday but awarded last month, Safe handed out a total of $2.475 billion in quotas to 11 qualified foreign institutional investors ranging from $50 million to $300 million.

Excluding QIA, they were: Hang Seng Bank and Korea Development Bank ($50 million each); Hai Tong Asset Management and Janus Capital Management ($100 million each); Schroder Investment Management ($125 million); Ontario Pension Board ($150 million); Macquarie Bank, Merrill Lynch International and HSBC Global Asset Management ($200 million); and Suva ($300 million).

As at the end of November, Safe had awarded $36 billion in quotas to 165 QFII licence holders.