04/05/2015

On April 29, 2015, the People's Bank of China announced the granting of a RMB Qualified Foreign Institutional Investor (RQFII) quota of RMB 50bn to Luxembourg. This key milestone, together with the strong growth in volume of RMB deposits, loans and financing activities in Luxembourg, the increasing number of RMB bonds listed on the Luxembourg Stock Exchange and of RMB-focused investment funds, as well as the presence of six Chinese banks in Luxembourg including one RMB clearing bank, reinforces the position of Luxembourg as a leading offshore RMB centre in all those sectors.

All channels available to gain direct access to the PRC capital markets, including the RQFII, its predecessor, the QFII, and Stock Connect, are available to managers in order to be used in their Luxembourg funds, in particular UCITS, to market their PRC strategies to the largest number of investors around the world. Pending the allocation of a RQFII quota to Luxembourg, fund managers were using RQFII quotas from other RQFII centres such as Hong Kong, London, Singapore, Frankfurt, etc. with their Luxembourg funds in order to implement and market their PRC strategies.

The recognition of Luxembourg as RQFII centre and granting of this RMB 50bn quota to be used by Luxembourg managers and investment funds will add more possibilities and flexibility for those managers to capture the growth of the PRC and make it available to their investors. For a comprehensive view of the conditions to be fulfilled to make use of QFII, RQFII and Stock Connect in Luxembourg investment funds, we invite to you read our note on this topic which has been updated to take into account to the above developments.

To read the full newsflash, please click on the link below:

Contacts

Claude Kremer

Partner

Claude Niedner

Partner

Private Equity & Real Estate

Stéphane Karolczuk

Partner

Investment Management - OLD

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