Domestic funds had previously been able to invest in offshore markets only through the Qualified Domestic Institutional Investor (QDII) programme.
The move, announced last Friday, “is conducive to product and service innovation, but also beneficial to promote smooth inter-operability between both Shanghai and Hong Kong markets, while raising the level of internationalisation of China’s asset management industry”, the regulator said.
Last week, in a separate move, China’s regulators removed the $1bn investment quota cap for overseas fund management firms that want to invest in the mainland.
The Shanghai index has taken off since the November launch of the Stock Connect, while Hong Kong’s index has been lacklustre. The lifting of the QDII requirement may provide a boost for Hong Kong stocks.
