Green light for UCITS to invest in China’s Interbank Bond Market
Asset managers investing in the Chinese Interbank Bond Market (CIBM) via the Luxembourg UCITS scheme now have the blessing of the Luxembourg regulator CSSF. The CSSF has confirmed its acceptance of investments into the Chinese Interbank Bond Market (CIBM) as fulfilling the requirements of UCITS for regulated markets. Thus a new option up for asset managers to invest into Mainland China opens up.
UCITS are a popular investment scheme for retail investors in many Asian countries. By using an RQFII quota, the UCITS can now invest up to 100% of its net assets in the CIBM.
The CIBM was established in 1997. Being still a young market, it has in the last years been subject to increasing regulation and is now an established over-the-counter (OTC) wholesale market for institutional investors.
In November 2013, the CSSF authorised the first RQFII UCITS, allowing the UCITS to invest up to 100% of its net assets in China A-shares. A-shares represent the equities of Chinese companies and are traded on the stock exchange of Shanghai and Shenzhen.