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NEEQ Issues the Implementation Rules for Securities Trading by QFIIs and RQFIIs
2020-11-02 A - A +


To regulate the trading activities of Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors (QFIIs and RQFIIs) on the NEEQ, NEEQ Co., Ltd. has formulated the Implementation Rules for Securities Trading by QFIIs and RQFIIs on the NEEQ (the Implementation Rules), as well as the Guidance for Information Reporting by QFIIs and RQFIIs on the NEEQ (the Guidance), in accordance with the Measures for the Administration of Domestic Securities and Futures Investment by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors issued by China Securities Regulatory Commission (CSRC), People's Bank of China (PBC), and the State Administration of Foreign Exchange (SAFE). The Implementation Rules and the Guidance were issued on October 30, 2020, and take effect as of November 1, 2020.

The Implementation Rules clarify the trading and clearing and settlement arrangements, and general regulatory requirements for QFIIs and RQFIIs. Firstly, it stipulates the scope of investment. Not only can QFIIs and RQFIIs invest in stocks, bonds and other securities already listed and traded on the NEEQ, they can also participate in the subscription of newly offered stocks, bonds and other securities. Secondly, it specifies the market access. QFIIs and RQFIIs can only trade the securities on the NEEQ through the securities brokers filed with the NEEQ Co., Ltd. Thirdly, it standardizes the day-to-day regulatory requirements by clarifying the requirements on information reporting, disclosure and equity ownership restrictions. Fourthly, it provides disciplinary measures for violations. For those fiduciary securities companies, custodians, QFIIs and RQFIIs and their actual investors who violate the relevant provisions of the Implementation Rules, the NEEQ Co., Ltd. can take self-regulatory measures or disciplinary actions in light of the violations.

The promulgation and implementation of the Implementation Rules makes investment by QFIIs and RQFIIs on the NEEQ an operable reality. It is of great significance for expanding the institutional investors, increasing the sources of stable long-term funds, enhancing market liquidity and stimulating the smooth and healthy operations of the NEEQ.

To ensure the timely investment by QFIIs and RQFIIs, the NEEQ Co., Ltd. has organized six securities companies and custodian banks as the pioneer institutions to complete development and testing of the relevant trading systems. The technical preparations have been ready for up and running. In the next step, under the leadership of the CSRC, the NEEQ Co., Ltd. will organize and implement the relevant work for QFIIs and RQFIIs to invest on the NEEQ, and encourage the active participation of various institutional and professional investors on the NEEQ, to promote the steady and healthy long-term development of the market.