Study On Risks Of QDⅡ Mechanism And Relevant Legal Issues

QDII , which means the mechanism of Qualified Domestic Institutional Investor, is mostly used to partly permit domestic investors invest in overseas capital market in the countries whose balance of international payments especially balance of capital accounts is not completely open and haven't achieved convertibility between domestic currency and foreign currency. As authorized institutional investor, not only QDII can operate overseas investment for itself, but also get permission to act as an agent to invest the overseas capital market for domestic personal investor. Thus, QDII provides a"channel"to foreign investment. But QDII in nature is an innovation of"Financial Control", it must accompany with risks. Besides the common risks of securities investment such as market risk or operation risk, carrying out QDII may enhance the contagions of external financial risk, intensify capital outflows. It also involves the reformation of our country's foreign exchange regulation system, and calls for strengthening cooperation of international securities supervision .In the NO.5 proclamation of PBC (People Bank of China), China announced to allow approved commercial banks, fund management companies and insurers to invest in overseas capital market. In order to propel QDII smoothly, we have to recognize the risks of this mechanism and find related legal measures to limit and control the risks.Part 1 introduces the fundamental meaning of QDII and its characters, there also a discussion on the necessities for China to promote QDII mechanism. Because China insists strictly control of interest, exchange and capital account now and even in a long time. QDII act as an innovation of capital control, can alleviate the shock to domestic capital market which caused by opening shot-term overseas investment, satisfy the invest demand of huge domestic funds and cultivate competitive domestic institutional investors. In other words, QDII is not only the transitional way we can use to propel capital account from control to opening, but also a protective measure before RMB convertibility.Part2 mainly analyze the risks during of QDII. In common senses, when a country pushes on QDII , it must faces market risks including interest risk and exchange risk, operation risk in overseas investment and international supervision risk. Due to our country's special situations, we may meet even more negative effects of QDII, including the aggravation of capital outflows, the lacking of matured institutional investor and failure of effective international supervision.Part3 is a key part. For avoiding the risks of QDII and commanding the development of capital account opening, we need perfect legal system of QDII. The author analyzes presently legal circumstances of QDII, considers practical situations, and addresses some legal measures including strictly picking QDII, put emphasis on institutional investors approval, rule the invest conducts of QDII, lead QDII to establish sound internal control mechanism, and reinforce information disclosure. Besides, we have to improve cooperation of international securities supervision.So far, there are many theses on QDII from economy perspective. Nevertheless, research on QDII legal problem still deficient, especially lacking of deep research on using legal instrument to limit and control the risks of QDII. The innovation of this paper is applying legal and economy methods in analyzing special risks of QDII in China, and gives suggestions on China QDII legal system. The double"Q"institution consists of QDII and QFII declares that China will gradually open capital account. From cautious and positive aspect, we should pay close attention to risks of QDII, and construct effective risk-oriented legal system...