A Study Of QFII Legal System

China Securities Regulatory Commission and People's Bank of China jointly issued Temporary Administrative Measures on Securities Investments by Qualified Foreign Institutional Investors (hereinafter referred to as QFII) and formally introduced QFII system into China. As a transient policy to open securities market to foreign capital, this is another major measure that embodies China's insistence to implement development strategy of opening to the outside. In three years operation, QFII has not only absorbed a large amount of foreign capital to mitigate the capital shortage in securities market, but also improved market structure that mainly constituted of individual investors by increasing percentage of institutional investors. Meanwhile, it also prompts listed companies to actively enhance their corporate administrative structure, boost operation performance and strengthen competitiveness.Although China capital market benefits tremendously from QFII, we should not ignore its downsides and problems occurring in course of its implementation. This article aims to probe into the downsides of QFII system and problems occurring in course of its implementation by studying International Law and give proposals on how to improve the current QFII system. The whole article, excluding conclusion, consists of six chapters and its main contents are as follows:Chapterl QFII Summary. In this chapter, definition of QFII, its content, development history and choice made by China capital market to open to the outside are introduced. QFII's impact on China's securities market is analyzed.Chapter2 Qualified Foreign Institutional Investors. Conditions of entry for QFII in China, application procedures are introduced and compared with regulations of other foreign areas in this chapter. Revision proposals are made based on imperfections of related regulations in China. QFII involved rights and obligations are listed.Chapter3 Trustee. The trustee plays an important role in operation of QFII. In this chapter, requirements for qualified trustees and qualification acquirement procedures are introduced first. Then legal properties of QFII trustship are analyzed. Rights and obligations of the trustee are explained. Risks in trustship are analyzed and preventive measures suggested.Chapter 4. Due to less important role of securities companies in QFII, only rights and obligations of securities companies are briefly introduced in this chapter.Chapter5 Investment Administration. Regulations regarding QFII investments scope, amount are studied and compared with corresponding regulations of foreign areas. Improvement proposals are provided based on the actual situation in China.Chapter 6 Legal relations and application of QFII cross boarder holding. Concepts concerning securities direct holding and indirect holding are explained. Legal relations under QFII securities holding mode in China are then analyzed. Legal proposals on how to protect interests of foreign investors and law application principles in case of disputes are raised.