SBI says venture with Shanghai firm can invest offshore yuan into China

HONG KONG Sun Dec 16, 2012 11:38pm EST

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HONG KONG Dec 17 (Reuters) - Japan's SBI Holdings said a fund management company it owns with a state-owned company in Shanghai has received approval to invest offshore yuan in China under a programme to promote global use of the Chinese currency.

In a filing on Monday with the Hong Kong stock exchange, SBI said the venture is the second entity and the first non-Chinese one to be approved under the Renminbi Qualified Foreign Limited Partner programme (RQFLP), launched in October by the Shanghai Municipal Office of Finance.

The first approved entity was a Hong Kong unit of Haitong Securities Co and Bank of Shanghai, which plans to raise up to $100 million.

SBI is gearing up to establish an industry fund with Shanghai Yidian, a large state-owned company directly managed by the Shanghai Municipal Government. Their fund will mainly target the Chinese information technology industry, SBI said in its filing.

The two companies will each commit 100 million yuan ($16.04 million) to the fund scheduled to be established in January, SBI said.

The RQFLP programme, an extension of Qualified Foreign Limited Partner (QFLP) project, allows foreign investors to invest offshore yuan into private equity funds and venture capital funds in China.

Under the QFLP programme, foreign investors were only allowed to invest in domestic funds using foreign-currency capital and the conversion into yuan was permitted only at each investment project payment stage with the exchange amount restricted by a pre-approved size.

The RQFLP programme allows investors to directly invest in funds using their own yuan positions or overseas yuan converted from foreign currency.

($1 = 6.2293 yuan) (Reporting by Michelle Chen; Editing by Richard Borsuk)

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