What is QFII shareholding? What kind of institution is QFII?

QFII system refers to the qualification system for foreign professional investment institutions to invest in China. It is a transitional system in which a country invests in the local securities market through a strictly regulated special account and opens the capital market to a limited extent when the currency is not fully convertible and the capital account is not yet open. This system requires foreign investors to meet certain conditions if they want to enter a country's securities market. With the approval of the relevant state departments, a certain amount of foreign exchange funds will be remitted and converted into local currency, and invested in the local securities market with a special account under strict supervision. QFII, as a transitional low-risk model, is playing a unique role in the gradual opening of China's securities market before the current money market is fully opened.

QFII system is a special channel to realize the orderly and steady opening of the securities market in countries and regions where the capital account has not been fully opened. Including South Korea, Taiwan Province Province of China, India and Brazil. Market experience shows that QFII is a way to introduce foreign capital steadily through the capital market when the currency is not freely convertible. Under this system, anyone who intends to invest in the domestic market must buy and sell securities through qualified institutions, which facilitates the government's foreign exchange supervision and macro-control, and its main purpose is to reduce the impact of capital flows, especially short-term "hot money", on the domestic economy and the securities market. Through qfii system, management can restrict and guide the entry of foreign capital, make it adapt to the development of domestic economy and securities market, and thus control the influence of foreign capital on domestic economic independence.

What is the impact of QFII shareholding?

The experience of Taiwan Province Province, South Korea and other places shows that after the introduction of qfii mechanism, the rational investment concept, which is keen on investing in blue chips, paying attention to dividends of listed companies and paying attention to the long-term development of enterprises, has become popular, while the corresponding speculation has decreased, greatly reducing the volatility of the market to a certain extent. Therefore, the introduction of QFII mechanism to attract qualified foreign institutional investors will help to further expand the ranks of institutional investors, and at the same time, it can learn from foreign mature investment concepts, promote the effective allocation of resources and promote listed companies to improve corporate governance.