China has set a complex new guideline for foreign institutional investors to run their yuan-denominated business in the mainland's equity markets. This is according to the People's Bank of China on Thursday.
Under the new rule, RQFIIs will have to open separate accounts to access RMB-related tradings. The PBOC is asking each overseas institution under the RQFII program to open at least two special deposit accounts.
One is a RQFII basic deposit account, plus a settlement account, but which can only be placed at a mainland bank that is picked by authorities to act as a custodian for QFIIs.
The PBOC says this marks another step in the internationalisation of the yuan currency.
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