Fri, Apr 28, 2017
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. Opalesque Exclusive: Ex-Man manager combines sustainable investing with AI/ML[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Dr. Richard Bateson, quant fund manager and physicist, has recently

  2. Hedge funds holding Puerto Rico bonds are looking at a long battle[more]

    Komfie Manalo, Opalesque Asia: Hedge funds which bought Puerto Rico's distressed debt bonds are facing the prospect of a long road ahead to recover their investments as the Caribbean island is attempting to use a U.S. Congress-approved rule that allows it to exploit a bankruptcy-like proceedings

  3. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  4. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V

  5. Service Providers - Colemore launches fee tracking service for limited partners[more]

    Following Colmore's successful launch in January 2017, the firm has announced the launch of FAIR.. FAIR is designed to help private equity investors independently validate fees and incentives charged by underlying managers, saving time and providing an extra level of comfort. There is a glob