ICBC (Europe) and Bank of China Luxembourg recently received regulatory approval as Luxembourg-based Renminbi Qualified Foreign Institutional Investors (RQFII).
In April 2015, the Chinese government announced to extend the RQFII quota of 50 billion RMB to Luxembourg. As major players of the cross-border RMB business in Europe, ICBC (Europe) and Bank of China made a quick decision to apply for the RQFII license and quota and successfully moved into the first group of RQFII holders in Luxembourg.
ICBC (Europe), which is also the RMB clearing bank in Luxembourg, is about to launch new sub-funds within its current UCITS SICAV, which will mainly invest in China’s onshore market and offer relevant asset allocation opportunities to the global investors.
The RQFII quota received by Bank of China will be assigned to the first Luxembourg-domiciled BOC UCITS fund targeting the Chinese domestic bond market. Bank of China (Luxembourg) S.A., which is the European Asset Management Platform of Bank of China Group, will perform as the investment manager. The bank expects more investment tools with China-focused concepts to be launched soon through this platform.
Luxembourg has made the UCITS a globally recognized brand and more than 67% of UCITS funds distributed internationally are based in Luxembourg. The Grand-Duchy is the largest investment fund centre in the world after the US. The RQFII scheme is particularly useful for fund managers who use Luxembourg as a platform for cross-border distribution.
Luxembourg is the largest European RMB fund centre and the 4th largest Dim Sum bond-listing centre globally behind its Asian peers.