HSBC, Citi announce first China securities lending transactions

Chinese flagHSBC and Citi have both announced the completion of their first securities lending transactions in mainland China from offshore investors using the revamped Qualified Foreign Institutional Investors (QFII) scheme. The scheme’s new rules, which came effective on November 1, give offshore investors expanded investment scope and permission to conduct more trading activity, including securities lending and bond repo, in a bid to attract more global investors. China has also combined the QFII with the RMB Qualified Foreign Institutional Investors scheme in order to lower entry requirements and simplify procedures. HSBC completed two securities lending transactions conducted by China Asset Management on the Shanghai Stock Exchange and Shenzhen Stock Exchange. Meanwhile, Citi announced the completion of a number of stock lending trades although it did not disclose the name of its counterpart. Asset servicers have welcomed the new rules which they see as a key element in the opening up of China’s domestic market to international investors and asset managers. In particular, allowing securities lending transactions is viewed as a helpful development. “Securities lending would help global investors realise flexible strategy deployment as they tap deeper into the China’s capital market,” said Brian Godins, head of securities services for Asia Pacific at HSBC. “This latest expanded investment scope and other relaxation measures will definitely help boost the attractiveness of QFII/RQFII and draw more foreign capital into China.” It is also hoped that the move will attract a wider range of alternative and specialist fund managers to the domestic market in China. “With this new QFII regulation, we expect that global brokers and hedge funds can finally play an active role in China’s A-share margin trading and securities financing, while private equity funds can enjoy a low-cost channel to invest in onshore companies with flexible repatriation, and asset owners and asset managers can lend out their securities for higher portfolio yield,” said Ji Yang, head of markets and securities services for China at Citi. © 2020 funds global asia

Sponsored Profiles

Sponsored feature: Another way of doing things

Nov 05, 2020

Funds Global Asia talks to Calastone’s Leo Chen about the growth of wealth management in Southeast Asia and the emergence of new models.

Sponsored feature: Asset allocators – How do you track your decisions?

Apr 06, 2020

Mark Barry, Head of Asset Allocation at Milestone Group, explores how a simple question can highlight opportunities to automate and streamline your asset allocation investment process.

Sponsored feature: How is DLT changing the global securities services landscape?

Oct 17, 2019

By Jeslyn Tan, global head of product management, securities services, at Deutsche Bank

Sponsored feature: A new base for fund distribution

Oct 16, 2019

To get the most value out of the digitisation of investment fund distribution, a blockchain-based infrastructure is fundamental. By Olivier Portenseigne, Managing Director and Chief Commercial Officer, Fundsquare.

Executive Interviews

Executive interview: Staying agile on the pandemic plan

Nov 05, 2020

Terry Pan, chief executive for Greater China, southeast Asia and Korea at Invesco Asia Pacific, tells us about managing a business during Covid-19, opportunities on the continent and US-China...

Executive interview: Hong Kong: Bridging the ESG gap

Nov 05, 2020

Dr King Lun Au, executive director at the Financial Services Development Council (FSDC) discusses Hong Kong’s “unique” role in developing ESG in the region with Romil Patel.


Roundtable: ‘What’s priced in versus what surprises’

Jan 04, 2021

As we head into 2021, our panel of experts in Singapore pore over the key risks that are not fully priced in, the impact of the incoming Biden administration on Asia and the dominant investment theme that is China. Chaired by Romil Patel.

Hong Kong roundtable: A ‘fragile Goldilocks situation’

Apr 06, 2020

With the global economy at a crossroads, our panel of experts share their thoughts on the market conditions, geopolitical volatility and growth opportunities. Chaired by Romil Patel in Hong Kong.