China eases quota restrictions for foreign institutional investors

China's regulators on Monday issued revised rules on foreign institutional investments in the country's domestic securities using the yuan currency, another step forward in opening up its markets and encouraging more fund inflows.

Renminbi Qualified Foreign Institutional Investors (RQFII) will be given quotas no greater than a certain proportion of their asset sizes after registration with the State Administration of Foreign Exchange (SAFE), the regulator said on its website.

If the desired investment quota surpasses the base quota, investors will need to gain approval from SAFE.

Foreign sovereign funds, central banks and monetary authorities are not restricted by asset size and can obtain quotas based on their investment needs.

The rules were jointly issued with the People's Bank of China (PBOC).

Individual RQFIIs needed to previously seek approval from SAFE for any quota to buy stocks and bonds in China and the amount of quota was given on a case by case basis.