Sat, Mar 24, 2018
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


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. John Paulson, once the industry's largest hedge fund, to return some investors' money[more]

    Komfie Manalo, Opalesque Asia: John Paulson is reported to be retuning some of his investors' money as a number of his hedge funds continue to suffer setbacks, reports

  2. Institutional Investors - Overdrawn pension fund scores gains[more]

    From Investments in big banks, pawn shops and rolling papers helped boost public safety workers' underfunded pensions this past calendar years, according to newly released figures. After recording middling returns in recent years, the Police & Fire Pension Fund (P&F) notched

  3. Activist Investors - The seven most undervalued stocks in Larry Robbins' portfolio, Stamford hedge fund still seeking shakeup of Taubman board[more]

    The seven most undervalued stocks in Larry Robbins' portfolio From ...On February 14th, Larry Robbins' firm Glenview Capital Management filed its quarterly Form 13F regulatory filing. The firm's stock portfolio totals $18.5 billion with 58 positions according to the latest

  4. Hot hedge fund loses 21% after bet on volatility goes wrong[more]

    From In December, Shahraab Ahmad shared with his hedge fund clients the principle that helped him trounce peers for two turbulent decades: steer clear of the crowd. He'd turned $50 million into an operation with more than $700 million over three years and delivered market-beating retu

  5. Opalesque Exclusive: Northern Trust builds on blockchain-backed private equity solution[more]

    Bailey McCann, Opalesque New York: Private equity clients at Northern Trust can now carry out audits of private equity lifecycle events directly from the blockchain. Northern Trust, working with PwC and other audit firms in Guernsey, has added this feature to its existing solution set for private