SSE responds to questions from the press on Guidelines No.1 on the Application of Securities Trading Rules of the Shanghai Stock Exchange for Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors

Today, under the approval of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) officially published the Guidelines No.1 on the Application of Securities Trading Rules of the Shanghai Stock Exchange for Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors (the QFII and RQFII Guidelines for short), which will take effect on November 1st, 2020. The SSE responded to questions from the press on the publication.

Question 1 What is the background to this revision of rules?
The Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII) schemes were implemented in 2002 and 2011 respectively. These two schemes have played a positive role in introducing long-term investment funds from overseas, improving investor structure, and promoting sound development of the domestic capital market.
In recent years, China's capital market has been steadily opening up both ways, and institutional and international participation in A share investment has been continuously improving. In order to achieve higher level of openness of the capital market and to further improve the QFII and RQFII schemes, the CSRC revised and integrated the Measures for the Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors, the Measures for the Pilot Program of Domestic Securities Investment by RMB Qualified Foreign Institutional Investors and associated rules, leading to the publication of the Measures for the Administration of Domestic Securities and Futures Investment by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors and the Provisions on Issues Concerning the Implementation of the Measures for the Administration of Domestic Securities and Futures Investment by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors.
Thus, the SSE made revisions to relevant business rules accordingly, and published the QFII and RQFII Guidelines in order to align with the revision of higher level regulations by the CSRC. These revisions will contribute positively to improving the openness of the domestic capital market, satisfying market needs, and promoting coordinated development of different channels of opening up.
Question 2 What are the major changes in the QFII and RQFII Guidelines published by the SSE?
The major changes in the QFII and RQFII Guidelines include these six aspects:
The first is to expand the scope of investment. In addition to the products already available, qualified foreign investors can invest in depository receipts, stock options, government-backed bonds, etc. At the same time, qualified foreign investors are allowed to participate in margin trading, securities borrowing and lending, and bond repurchase.
The second is to modify the information reporting requirements. In order to further reduce the burden of information reporting for market entities, the requirements for information reporting have been revised, the basic reporting obligations of relevant entities have been stipulated, and business guidelines have been formulated accordingly.
The third is to adjust the initial notification threshold of shareholding by foreign investors. When the proportion of the total A-share stocks of a single listed company held by all foreign investors collectively reaches or exceeds a certain percentage, the SSE will announce the total number and percentage of stocks of the company held by foreign investors. The initial notification threshold will be lowered from 26% to 24%.
The fourth is to optimize matters related to holding and closing positions. This revision improves the related handling methods in case the collective shareholding of foreign investors passively exceeds 30% of all stocks of a listed company, adjusts the order in which positions are closed when the total shareholding of foreign investors exceeds the limit, and clarifies the circumstances under which foreign investors can apply to continue to hold relevant shares after being notified to reduce their shareholding.
The fifth is to improve the relevant rules for non-trade transfers. It is clarified that qualified foreign investors shall conduct negotiated transfer of shares of listed companies according to relevant business rules. Newly-added qualified foreign investors may conduct non-trade transfers of securities in accordance with the relevant rules of securities depository and clearing institutions.
The sixth is to strengthen continuous supervision. The revision clarifies the information disclosure obligations of qualified foreign investors and foreign investors under their names, and specifies the requirements for information disclosure. It also strengthens the obligations for commissioned securities and futures companies to manage the trading conduct of qualified foreign investors and their clients.
Question 3 After the revision, the initial notification threshold of shareholding by foreign investors is lowered to 24% from the previous 26%. What are the major considerations for this adjustment?
According to relevant regulations, the total shareholding by foreign investors of the A shares or domestic shares of a single listed company may not exceed 30% of the total shares of that company. As a reminder that foreign shareholding is close to the limit, the SSE has set up the initial notification threshold.
In recent years, with the inclusion of A shares into MSCI, FTSE Russell and other major international indices, foreign investors are more enthusiastic about and confident in investing in A shares. Through our communications, many foreign investors and financial institutions expressed the hope to keep up with the level of foreign shareholding in listed companies, so as to have sufficient time to make adjustments.
With the guidance from the CSRC, the SSE conducted feasibility studies in this regard. As a measure to facilitate trading, the initial notification threshold of foreign shareholding is lowered from 26% to 24%, i.e. when all foreign investors collectively hold 24% or more of the total A-share stocks of a single listed company, the SSE will, before the market open of the next trading day, announce on its website the total number and percentage of stocks of the company held by foreign investors.
During the course of opening-up of China's capital market, the SSE will, with the guidance from the CSRC, continue to pay attention to the demand of foreign investors, upgrade our investor services, improve the capital market system and rules, and facilitate the participation of foreign investors in the A share market.

上交所就《上海证券交易所证券交易规则适用指引第1号——合格境外机构投资者和人民币合格境外机构投资者》答记者问
今日，经中国证监会批准，上交所正式发布《上海证券交易所证券交易规则适用指引第1号——合格境外机构投资者和人民币合格境外机构投资者》（以下简称《QFII、RQFII指引》），自11月1日起施行。就《QFII、RQFII指引》的发布情况，上交所相关负责人回答了记者的提问。
一、请介绍一下本次规则修订的主要背景？
合格境外机构投资者（QFII）和人民币合格境外机构投资者（RQFII）制度分别于2002年和2011年落地实施。这两项制度在引入境外长期资金、优化投资者结构、促进资本市场健康发展等方面发挥了积极作用。
近年来，我国资本市场双向开放不断扩大，A股投资者机构化及国际化水平不断提升。为实施资本市场更高水平对外开放，进一步优化完善QFII、RQFII制度，中国证监会对《合格境外机构投资者境内证券投资管理办法》及其配套规则、《人民币合格境外机构投资者境内证券投资试点办法》及其配套规则进行了修订整合，形成了《合格境外机构投资者和人民币合格境外机构投资者境内证券期货投资管理办法》和《关于实施〈合格境外机构投资者和人民币合格境外机构投资者境内证券期货投资管理办法〉有关问题的规定》。
在此背景下，上交所对相关业务规则进行了相应的修订，发布了《QFII、RQFII指引》，以衔接中国证监会上位规章修订。本次修订对提高资本市场对外开放水平，满足市场需求，促进不同开放渠道协调发展具有积极意义。
二、请介绍一下上交所发布《QFII、RQFII指引》的主要修订内容？
《QFII、RQFII指引》主要修订内容包括以下六方面：
一是扩大投资范围。除原有品种外，合格境外投资者可投资于存托凭证、股票期权、政府支持债券等；同时，允许合格境外投资者参与融资融券交易、转融通证券出借交易以及债券回购交易。
二是修改信息报送要求。为进一步减轻市场主体信息报送负担，对信息报送要求作了修改，规定了相关主体的基本报送义务，并同时制定了配套指南。
三是调整外资持股初始披露比例。全部境外投资者合计持有同一上市公司A股股份达到或超过一定比例时，上交所将公布其已持有该公司股份的总数及占公司股份总数的比例。初始披露比例由26%下调至24%。
四是优化持仓与平仓相关事项。本次修订进一步完善了境外投资者合计持股比例被动超过30%情形的相关处理方式，优化了境外投资者合计持股超过限定比例时的平仓顺序，明确了被通知减持后可申请继续持有相关股份的情形。
五是完善非交易过户相关规定。明确合格境外投资者按照上市公司股份协议转让相关业务规则，办理协议转让所持上市公司股份；新增合格境外投资者可以按照证券登记结算机构的有关规定，办理证券非交易过户相关情形。
六是加强持续监管。明确合格境外投资者及其名下的境外投资者的信息披露相关职责，完善信息披露具体要求；强化受托证券期货经营机构对合格境外投资者的客户交易行为管理职责。
三、在本次修订后，外资持股初始披露比例从26%下调至24%。请介绍一下该项调整主要出于什么考虑？
根据相关规定，所有境外投资者持有单个上市公司A股或境内挂牌股份的总和，不得超过该公司股份总数的30%。为提示境外投资者持有单个上市公司股份的比例即将达到上限，上交所设置了外资持股初始披露比例。
近年来，随着A股纳入MSCI、富时罗素等国际重要指数，境外投资者投资A股的热情和信心不断增强。在与境外投资者和金融机构交流的过程中，不少投资者和机构提出，希望可以及时了解外资对上市公司整体持股水平，以便有更充分的时间做出反应。
上交所在中国证监会的指导下，对相关意见建议进行了可行性研究。作为提升交易便利性的一项举措，现将外资持股初始披露比例由26%调整至24%，即当全部境外投资者持有单个上市公司A股股份合计达到或超过该公司股份总数的24%时，上交所将于次一交易日开市前通过上交所官网公布其持股总数及占公司股份总数的比例。
在我国资本市场持续对外开放的过程中，上交所将在中国证监会的指导下继续关注境外投资者需求，不断提升投资者服务，持续完善资本市场制度规则，提升外资参与A股市场的便利程度。