China allows banks, funds to invest overseas

SHANGHAI, Apr 14: China will allow banks and fund managers to invest overseas on behalf of individuals and institutions, and will relax controls over foreign exchange accounts, the central bank said on Friday.

Banks may convert domestic currency held by individuals or institutions in order to invest in overseas products with fixed returns, the central bank said on its Web site (www.pbc.gov.cn).

Funds will be able to invest individuals' or institutions' foreign currency holdings in overseas securities products, including stocks. The new policy also expands the securities investment options open to insurance companies.

A second policy relaxes the controls on foreign exchange accounts, simplifies approval procedures for foreign exchange payments in the service trade and makes it easier for corporations and individuals to buy foreign currencies.

The bank did not put a date on the change in investment policy but said the foreign exchange account policy will take effect May 1.

Reuters