BOC Wants Rich, Savvy Investors to Put Money in Hong Kong


Bank of China wants only rich and experienced mainland residents to invest directly in Hong Kong, the bank's chairman said in an interview published on Monday.

But Xiao Gang, speaking to the People's Daily, did not give a detailed timetable for the launch of the service or specify minimum or maximum investment amounts. Xiao had said at a news conference on Aug. 23 that his bank hoped to be offering service within a week.

Xiao said in the interview that investors with limited cash could buy Hong Kong securities through funds that the bank sells under the Qualified Domestic Institutional Investor (QDII) scheme.

"It is true that investing in Hong Kong stocks requires a certain amount of capital and a capacity to endure risk; only investors with sufficient funds and investment experience should invest in Hong Kong stocks directly," said Xiao. "It is better for investors with limited capital to invest in Hong Kong stocks through QDII products," he added.

The minimum subscription for a BOC QDII fund is 50,000 yuan.

China's State Administration of Foreign Exchange announced on Aug. 20 that mainland residents would be allowed for the first time to invest directly in Hong Kong securities by going through Bank of China's branch in the northern port city of Tianjin.

But the scheme has yet to start as officials work out technical details. Bankers say the securities regulator is worried that an exodus of capital could undercut support for the domestic share market.

Xiao said his bank had completed preparations and was awaiting final regulatory approval.

He said the idea of allowing mainland residents to invest directly in Hong Kong was developed a year ago by BOCI, the bank's securities arm in Hong Kong, and the Tianjin branch.

The idea was taken up by municipal leaders in Tianjin, which is being used as a testing ground for financial liberalization, and was later endorsed by "relevant state departments", Xiao said.