The China Securities and Regulatory Commission (CSRC) has published consultation drafts on proposed changes to the Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII) programmes. Of note is the expansion in investment scope for QFII and RQFII, which extends the products covered to include RMB commodity futures that are listed and traded on PRC commodity futures exchanges approved by the CSRC.1
The commodity futures exchanges will propose eligible contracts for the CSRC’s approval. Although specific details have not yet been provided by the CSRC or commodity futures exchanges, it is widely expected that such eligible contracts could go beyond those already available to international investors (e.g., crude oil futures, iron ore futures and purified terephthalic acid (PTA) futures). With each of these exchanges already considering the launch of new futures products that will be accessible to offshore investors (e.g., technically specified rubber (TSR) futures to be launched by the Shanghai International Energy Exchange), the number of commodity futures is very likely to increase.