Fri, Feb 12, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

China relaxes hurdles for foreign boutique managers and expands permitted offshore investments for insurers

Friday, November 23, 2012
Opalesque Industry Update - On 22 October 2012, the China Insurance Regulatory Commission (CIRC) issued the long-awaited Implementation Measures to the Provisional Measures for the Overseas Investment with Insurance Funds (Implementation Measures).

The Implementation Measures introduce two significant developments. First, they specify the qualification requirements for a "Foreign Delegated Person" licence which is needed to manage the offshore investments of China’s insurance funds. Prior to the issuance of the Implementation Measures, the qualification requirements, particularly in relation to assets under management (AUM) of a foreign manager, were not spelled out. As a result, the CIRC had not issued a "Foreign Delegated Person" licence for some years. Under the new measures, the AUM of the foreign manager’s group companies may be aggregated to fulfil the AUM requirements. Also, there are relaxed rules for foreign managers, known as boutique managers, who specialize in certain asset classes. The Implementation Measures open the door for global asset managers to obtain a licence to manage China’s insurance mandates.

The second significant development is the extensive expansion of the permitted offshore investments for insurance funds, both in terms of products and markets. Before the Implementation Measures, insurance funds could only invest in certain stocks and bonds issued or listed in Hong Kong. Insurers in the PRC can now invest in 45 of the world’s markets. The permitted investment products now cover money market products, fixed income products, equities including unlisted stocks in various industries, real estate, securities investment funds, private equity funds, REITs, and derivatives for hedging purposes. A securities investment fund is a permissible investment if it meets certain requirements such as having been approved by or registered with the securities regulatory authority in one of the 45 markets, having a track record of at least three years, and its manager meeting the requirements applicable to the "Foreign Delegated Person".

The Implementation Measures are expected to result in a significant amount of insurance funds being channelled to offshore markets. Under the new rules, a PRC insurer is permitted to invest an amount not exceeding 15% of its total assets into overseas markets. Based on statistics released by the CIRC, PRC insurance assets as of the end of 2011 totalled about RMB 6 trillion, which means around RMB 900 billion (about US$145 billion) could be invested overseas this year. This development presents significant business opportunities for global fund managers and boutique managers.

This alert was published by international law firm Deacons, Hong Kong. Corporate website: Source

fg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Credit Suisse cherry picks hedge fund ideas[more]

    From FT.com: Credit Suisse Asset Management plans to cherry pick profitable concepts from hedge funds with the launch in Europe of a “best ideas” strategy. The investment arm of the Swiss bank said the strategy will separate it from other funds blighted by “overcrowding problems”. It comes at a time

  2. Investing - Hedge funds bet on risks in U.S. blue-chip debt, Hedge funds bets against bank credit risk paying off, Tiger Global still likes Internet names, gets pointers from Jeter[more]

    Hedge funds bet on risks in U.S. blue-chip debt From WSJ.com: Hedge funds are betting the next bond sector to crack will be the $4.5 trillion market for the safest U.S. corporate debt. New York’s Perry Capital has placed a $1 billion wager against investment-grade bonds issued by 10 comp

  3. Short Selling - Hedge fund manager Kyle Bass is shorting real estate—again, Top US hedge fund has €80m short position in Paddy Power Betfair[more]

    Hedge fund manager Kyle Bass is shorting real estate—again From Fortune.com: He also predicted the mortgage crisis in 2008. Hedge fund manager Kyle Bass, who runs Dallas-based Hayman Capital, tanked the stock of a little-known real estate financier Friday by revealing that he is shorting

  4. Investing - Real estate secondaries sole 'bright spot' in 2015, As hedge funds stumble, one firm prepares to buy illiquid stakes[more]

    Real estate secondaries sole 'bright spot' in 2015 From IPE.com: The secondary market for property was the sole “bright spot” over the course of 2015, as hedge fund secondaries saw deals fall by two-thirds, according to a wide-ranging survey of the market. Setter Capital said 2015 saw th

  5. Asia - Hedge fund manager Kyle Bass estimates China's foreign reserves below critical level[more]

    From Nasdaq.com: Investor Kyle Bass stepped up his attack on China's currency, arguing in an investor letter distributed Wednesday that the second-largest economy's foreign reserves are "already below a critical level." The comments mark the latest effort by hedge funds and other investors to raise