Interim Measures on Pilot Program for Outbound Investment by Qualified Domestic Limited Partners in Hainan Province Promulgated
Hainan Local Financial Regulatory Administration
Hainan Branch of the State Administration of Foreign Exchange
Hainan Provincial Administration for Market Regulation
Hainan Branch of the China Securities Regulatory Commission
April 8, 2021
April 8, 2021
On April 8, 2021, Hainan Local Financial Regulatory Administration, Hainan Branch of the State Administration of Foreign Exchange, Hainan Provincial Administration for Market Regulation and Hainan Branch of the China Securities Regulatory Commission jointly released the Notice on Promulgation of Interim Measures on Pilot Program for Outbound Investment by Qualified Domestic Limited Partners in Hainan Province (the “Notice”), which opens up new channels for overseas investment and cross-border wealth management of domestic investors in Hainan, and further stimulates the vitality of various market entities.
According to the Notice, Qualified Domestic Limited Partners (“QDLP”), as the pilot fund management enterprises, may raise funds from qualified domestic investors and set up pilot funds to invest in overseas primary and secondary markets after passing the qualification approval and obtaining a quota. The Hainan QDLP scheme has the following features compared with those in Shanghai, Beijing, etc.:
i. Easy Entry. Under the Hainan QDLP scheme, the registered capital requirement for the pilot fund management enterprise should be no less than RMB 5 million yuan or equivalent in foreign currencies. Any entity of the controlling shareholder, actual controller or executive business partner of the pilot fund management enterprise or a related entity of any of the above entities must not have been seriously reprimanded by the local regulatory authority in the previous one year.
ii. Wide Range of Investment. The outbound investment scope of pilot funds includes equity and bonds of overseas non-listed enterprises, stocks and bonds that are not publicly issued or traded by overseas listed enterprises, the overseas securities market (including financial instruments traded in the overseas securities market, etc.), overseas equity investment funds and securities investment funds along with foreign commodities and financial derivatives.
iii. Unlimited Quota. Under the precondition of not exceeding the total QDLP quota of Hainan Province, there is no limit to the quota application of a single pilot fund management enterprise and the investment quota of a single project, and the relevant units will determine the approved pilot quota according to the actual needs of the project.
iv. More Flexibility. The Hainan QDLP scheme proposes that the balance of the QDLP pilot enterprises’ foreign investment quota shall be managed and the pilot fund management enterprises can initiate and establish more than one pilot fund. Further, the outbound investment quota of a single pilot fund may be flexibly adjusted among the funds established by the pilot fund management enterprises.