Shanghai Has Resumed QDLP Quotas After Two-Year Suspension, Sources Say
Zhou Ailin
DATE:  Dec 29 2017
/ SOURCE:  Yicai
Shanghai Has Resumed QDLP Quotas After Two-Year Suspension, Sources Say Shanghai Has Resumed QDLP Quotas After Two-Year Suspension, Sources Say

(Yicai Global) Dec. 29 -- Shanghai has resumed reviews of Qualified Domestic Limited Partnership applications after a two-year suspension, several sources told Yicai Global.

Foreign institutions partaking in the QDLP program can raise a quota of yuan funds from Chinese investors and invest this money abroad. Yicai Global attempted to confirm the source's claims with the Shanghai Municipal Financial Service Office and the State Administration of Foreign Exchange but has not received an official response as of time of publishing.

The municipal office has handed out licenses to three batches of 15 institutions since a pilot program began in 2013, but suspended the program in late 2015.

"A lot of foreign institutions have submitted applications," an employee at a firm which was among the first batch of QDLP recipients told Yicai Global. "The authorities have already interviewed some. Foreign institutions are more mature in terms of recruitment and fundraising than before, they're just waiting for licenses and quotas."

His comments were backed up by the top China representative of a foreign fund.

"However, it remains uncertain whether or not they'll get [the licenses]. New applications are more likely to receive the new quotas," he added, saying regulators may issue six QDLP licenses early next year.

"The agencies have expressed their intention to hand out the licenses, but haven't said they will grant us new quotas," said a marketer at another foreign asset manager which has submitted an application.

World-leading hedge funds and asset managers, such as Winton Capital Management Ltd., Och-Ziff Capital Management Group LLC and BlackRock Inc. are among the institutions that already have a QDLP license.

Shanghai financial office required institutions to have over USD10 billion in managed assets, years of experience in the secondary market and a proven track record when it issued the first batch of quotas, to reduce the risk of outbound investment.

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Keywords:   QDLP,CAPITAL OUTFLOW,Shanghai,Financial Reform