Shanghai has designed a pilot scheme for the qualified foreign limited partner (QFLP) system, and submitted the plan to the State Administration of Foreign Exchange and the Ministry of Commerce for approval, said Fang Xinghai, director of the Financial Services Office of Shanghai.
Fang said that the QFLP system is expected to start within the year.
Under the QFLP system, qualified foreign investors would be allowed to convert their foreign capital into Chinese currency RMB and invest the RMB-denominated capital in China's domestic private equity funds and venture capital funds.
Fang said that work on the cross-border exchange-traded funds (ETFs) has gone smoothly. There are no policy issues preventing the launch of cross-border ETFs, said Fang.
In the meantime, Fang said that Shanghai is encouraging the relevant institutions to participate in the small Qualified Foreign Institutional Investor (QFII) scheme, which allow overseas RMB holders to invest in China's domestic stock markets via securities and funds companies in Hong Kong.
Fang also said that the central bank has approved Shanghai to establish a credit transfer market.
