Foreign fund access still uncertain under new policy

On 12 January 2017, China again loosened foreign investment restrictions in the financial industry by issuing the Notice on Several Measures for Expansion of China’s Opening up to the Outside World and Active Utilization of Foreign Capital.

The notice requires amendments to the Foreign Investment Industries Guidance Catalogue and relevant regulations to loosen the foreign investment restrictions in the areas of service industry, manufacturing industry, mining industry, etc. As to the service industry, the notice mainly focuses on loosening the foreign investment restrictions of financial institutions such as banks, securities companies, securities investment fund management companies, futures companies, insurance companies, etc. China’s media have reported this as a huge step towards opening up the financial industry, however foreign capital access to China’s financial market still has a long way to go, based on recent experience.

After recent rounds of the China-US Strategic and Economic Dialogue, and of the China-UK Economic and Financial Dialogue, there has been a significant policy consensus reached by releasing FAQ(X) Regarding Registration and Filing of Private Securities Fund, allowing foreign-funded private securities fund management institutions to access China’s securities market and conduct business including securities trading in China’s secondary market.

Elaine Luo is an associate at AllBright Law Offices in Shanghai