The licence further expands BlackRock’s ability to invest directly into China’s domestic capital markets, including the A-Share equity and onshore bond markets.
According to the UK’s Financial Services trade and investment board, at the fifth UK – China Economic and Financial Dialogue, the Chancellor of the Exchequer, George Osborne, agreed a package of measures that purported to cement London’s position as main western hub for Remnimbi trading.
Part of this package included awarding the first RQFII quota outside Greater China, with an allocation of RMB 80b (£7.6bn).
The licence granted to BlackRock allows it now to apply for investment quotas from China’s state administration of foreign exchange.
Thomas Fekete, Head of the iShares product team for EMEA at BlackRock said: “The award of our second RQFII licence complements our existing China access licences and is recognition by the CSRC of our commitment to growing the BlackRock China business. It means we will be able to add to the investment solutions we offer to our clients.”
BlackRock’s North Asia Asset Management subsidiary was granted the firm’s first RQFII licence in March this year, the group said, and it received a $320m (£187m) investment quota in June.
Before that, the BlackRock Institutional Trust Company received its first QFII licence in July 2011; the group received its second in October 2012.
In a speech at the UK-China Financial Forum earlier this month, Chancellor of the Exchequer, George Osborne said he welcomed the news that “the Chinese authorities have awarded new licenses to UK companies so they can make RMB denominated investments into China.”
He said this was a major outcome of his visit to Beijing last October and confirmed that “licences will go to UK asset managers, HSBC Asset Management and Blackrock’s UK subsidiary”.
HSBC Asset Management told Portfolio Adviser it is: “pleased to confirm it has received verbal confirmation that its RQFII application has been granted.” But, it said it couldn’t yet go into any further details.
