SCEP to Gain Wider Access to Chinese Stock and Bond Markets
According to the official website of China Securities Regulatory Commission (CSRC), the examination of qualified foreign institutional investor (QFII) of Sequoia China Equity Partners (SCEP), Sequoia Capital China’s affiliate for open market, has been accepted.
As early as June 2020, SCEP reported its application to CSRC. Since its establishment in 2005, Sequoia Capital China’s venture capital business has invested in more than 1,000 enterprises with the potential for high development, among which are more than 130 enterprises that have been listed and more than 100 companies that have garnered unicorn status wherein they have topped a $1 billion valuation.
The two-decade old QFII program is one of the most important systems for China’s financial market and permits certain licensed international investors to trade in China’s stock exchanges. Before the launch of the QFII program, investors from other nations were not allowed to buy or sell stocks on Chinese exchanges due to the country’s tight capital controls. A similar program to QFII, the RMB QFII program, imposes fewer restrictions on overseas investors and makes it easier for direct investment in China’s domestic capital markets.
In recent years, as an important channel for global investment in the Chinese market, the QFII program has included more members. Already this year twelve institutions have submitted QFII applications.
SEE ALSO: Sequoia China Raises $480M for Its Seed Fund III
Under the backdrop of a steady recovery for economic growth, the Chinese market has great investment potential. CICC predicts that the annual net inflow of overseas funds into A-shares in China in 2023 may be between 300 billion yuan ($43 billion) and 400 billion yuan ($57 billion).