Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada Has Been Approved By China as "Qualified Destination for Chinese Investment"

On April 23, 2010, Canada's Minister of Finance issued a press release announcing that "Minister of Finance Welcomes Designation of Canada as Qualified Destination for Chinese Investment".

The Press Release states:

The Honourable Jim Flaherty, Minister of Finance, today welcomed an agreement with the China Banking Regulatory Commission that designates Canada as a destination for Chinese banking wealth management business under China’s Qualified Domestic Institutional Investor (QDII) program.

“This agreement will give Canadian financial markets access to up to US$8 billion in investment capital,” said Minister Flaherty, who made the designation a key objective of his trip to China in August 2009.

“This represents a strong vote of confidence in Canada’s economic prospects and the soundness of Canada’s financial system.”

The QDII program allows approved institutional investors in China, including banks, fund management companies and insurance firms, to invest funds pooled from their mainland clients in approved overseas financial markets.

China’s three financial sector regulatory commissions, for banking, insurance and securities, share responsibility for the program. To date, the banking and securities commissions have concluded an exchange of letters with the provincial securities commissions, allowing Canada to be designated as a destination for mainland China investment.

Canada is working with the China Insurance Regulatory Commission to conclude an agreement to facilitate Chinese insurance companies’ wealth management investments in Canada.

“This is a timely agreement, coming as our fellow G20 partners discuss the need to maintain open capital markets,” said Minister Flaherty. “It also reinforces to me the value in personally visiting our trading partners to discuss issues of mutual importance. I hope to return to China in the near future to continue the valuable dialogue we have established.”

China’s Qualified Domestic Institutional Investor (QDII) program enables an institutional investor that has met certain qualifications to invest in securities outside the People's Republic of China.  The China Securities Regulatory Commission may grant a limited avenue for institutional investors such as banks, funds and investment companies to invest in foreign-based securities.

China has granted the designation on a limited number of countries, including Hong Kong and Britain.

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