BlackRock’s ETF business iShares looks set to storm ahead in the Chinese exchange traded fund market, as the asset manager is granted a second Renminbi Qualified Foreign Institutional Investor (RQFII) licence by the Chinese regulator.
The China Securities Regulatory Commission (CSRC) awarded BlackRock Advisors (UK) Ltd the licence, which means that iShares could launch an ETF on the domestic A-Shares market. However, iShares would not comment on any products it has in the pipeline.
To date, only db X-trackers, Source and ETF Securities have launched physically backed China A-share ETFs.
The RQFII quota allows the provider, in this instance BlackRock, to invest in domestic capital markets in China including the A-Share equity and onshore bond markets. Once given a licence the provider is then able to apply for investment quotas from the State Administration of Foreign Exchange.
Thomas Fekete, head of the iShares product team EMEA at BlackRock, said in a statement: “China is an important investment destination for our clients globally and we are proud to be among the first asset managers in London to be able to offer direct access to Chinese investments.”
“The award of our second RQFII licence complements our existing China access licences and is recognition by the CSRC of our commitment to growing the BlackRock China business. It means we will be able to add to the investment solutions we offer to our clients.”
BlackRock Asset Management North Asia Limited was granted the firm’s first RQFII licence in March 2014, which received a $320 million (RMB 2 billion) investment quota in June this year.
iShares already has 16 ETFs with China exposure on offer.