Tuesday saw SAFE announce that it has.........>

CHINA: Tuesday saw SAFE announce that it has decided to remove the QFII & RQFII

quota limits. SAFE will also start to revise the rules related to offshore

investors' FX remittance & seek State Council approval to simplify the

registration/approval process to use the market access points. While it is easy

to brush the move under the carpet owing to the limited use of the quotas, some

points are worth noting. Both channels do not have a daily trading limit, which

presents an advantage vs. the stock connect programmes, although the licencing

requirement is a hindrance vs the stock connects. The channels also have wider

access to A-shares than the stock connect programmes, and are subjected to

slightly less strenuous foreign holding limits than stock connect activities.

- While the move will not trigger any notable sharp capital inflows it does

fulfil 1 of FTSE's 2 outlined criteria to boost the inclusion of A-shares via

QFII & RQFII in its relevant indices; namely "an increase in the aggregate QFII

& RQFII quota levels." The remaining criteria was the "availability of Delivery

versus Payment via QFII & RQFII." There was no move to relax restrictions for

the outbound Qualified Domestic Institutional Investor (QDII) scheme.