China to double QFII quotas to $ 20 billion-paper

BEIJING, Mar 12 (Reuters) China plans to increase inbound portfolio inflows under the Qualified Foreign Institutional Investor (QFII) scheme and to loosen the rules of the programme, the Economic Observer newspaper reported at the weekend.

The paper quoted unidentified sources as saying total QFII quotas would be doubled to billion.

All but million of the current quota of billion has been allocated to 49 foreign investors, the paper said. Three others have won permission to invest but have not yet been given a quota.

Individual quotas would be increased to a maximum billion from 0 million, the paper said.

It said QFII investors would be able to repatriate funds several times a year instead of just once, as is the case now.

They also would be permitted to open foreign currency accounts to hold their cash, pending investment, instead of being required to convert it all into yuan, the paper said.

The lock-up investment period for long-term investors such as pension funds and insurers would be reduced to 3 months from 12 months, the paper said.

Reuters DKS VP0640