Study On Qualified Foreign Institution Investors (QFII) Institution

The internationalization of securities markets in the world and China's entry into WTO make it an imperative trend for the opening-up of China's securities market to be gradual wide. But the capital market is still not wide open and the securities market is imperfect in Chinese mainland. Under this circumstance, it is a main problem to keep the securities market steadily while it is opening. So it is important to research the QFII institution, pointing out that China implement QFII institution is materially change in foreign capital strategic and innovation of advancing capital account, meanwhile it accumulates experience for the more opening-up of China's securities market. Through economics analysis and law analysis, combining with compare analysis etc, this paper starts with the conception of QFII institution, mainly introduces its theoretics basic, and then uses experience of the other countries and region for reference, trying to find out measures to perfect Chinese implementing QFII institution. The text generally composes four parts. The first part brings forward the establish of QFII institution trough the commonly evolution path of opening-up of securities market,introducing its meaning and function. The opening-up of securities market is the signify makeup in opening-up of capitals market. From the churchyard angle, implementing QFII institution is external opening,capital opening and financing opening of securities market, it can boost up the capital supply of securities market, optimize the structure of investors, upgrade the efficiency of securities market, perfect the structure of corporate governance and restore the supervise system of securities market etc. At the same times, it may bring about the risks of international conduct,idle fund's impact, corporate dominate right lose and valuta fluctuation etc. The second part explains the four theoretics basics of implementing QFII institution. The CAPM theory expatiate impetus that the foreign securities capital invest in other countries; The study on fluidity of foreign securities capital explain the base according to which the foreign investors choose their direction in some other countries. The research of comparing foreign securities investment(FSI) to foreign direct investment(FDI) emphasize the relative advantage of FSI; The study on characteristic of institution investors consolidate the feasibility to implement the QFII institution. The third part introduces the experiences of some countries that have implemented the QFII institution, thus argument the refer value to China. Comparing to new market economic countries or some regions, it is not necessary for the developed countries to implement QFII institution owing to opening-up of their capital accounts. The experiences of China Taiwan region and Korea is worthy of studying, including the following aspect: choosing proper opening-up opportunity and gradual opening-up mode, the presence of strongly supervise from the government, paying attention to safeguard of the inside and outside investors, making the foreign institution investors use capital more efficiently. emphasizing the relationship of FSI and FDI, constructing the inside securities market itself well and dealing with the problem that how to combine A-shares and B-shares etc. The fourth part stresses on the QFII institution in China. Entering to WTO advanced the course of opening-up of Chinese securities market, while as far as the whole macro economic environment is concerned, China have been qualified for implementing QFII institution. Since the QFII introduce into China in December 2002,there are some problems in the practice, such as distemperedness of the supervise system in securities market, the designing disfigurenment of QFII institution, the potential risk rooted in QFIIs etc. if these problems are solved well, it will advance the course of implementing of QFII institution. QFII institution have continued the direct indraught of foreign capital and it is the new way to introduce foreign capital into China. As far as how to make the QFII become effective is concerned, the optimized policy compages is fundamentality.