Country Focus: Spotlight on China
Asset managers, both in and outside China, are benefitting from far-reaching government-sponsored changes in the country’s financial system. Charles River Development has made a major commitment to the Asia-Pacific region, including China, tailoring the Charles River Investment Management System (Charles River IMS) and providing local support to meet our Chinese clients’ unique needs.
“Charles River IMS is in tune with workflows and security types specific to China,” said Cameron Field, Managing Director, Asia Pacific, Charles River Development. “We have also invested heavily in our bilingual implementation and technical support capabilities and Mandarin-speaking experts. We continue to identify how we can best serve clients, given the changing regulatory environment.”
The openings of the Shanghai and Shenzhen stock exchanges in the 1990s were followed by two deregulation schemes specifically put in place as catalysts for growth for the asset management industry: The Qualified Domestic Institutional Investor (QDII); and The Qualified Foreign Institutional Investor (QFII).
- The Qualified Domestic Institutional Investor (QDII) scheme, established in 2006, allowed approved domestic banks, fund houses, security institutions and insurance companies to invest into international assets on behalf of their clients. Initially limited to fixed income and money market products, the scheme has been expanded to include equity funds.
- The Qualified Foreign Institutional Investor (QFII) scheme was launched in 2003. It allows licensed foreign investors to trade RMB-denominated A-shares in the Shanghai and Shenzhen stock exchanges, albeit with a limited quota. There are approximately 80 approved foreign institutional investors under the QFII program.
The QDII program has presented the opportunity for Chinese asset managers to re-evaluate front- and middle-office processes to automate and streamline their investment management operations across the newly expanded opportunity set. Traditionally, these operations were handled via spreadsheets, or single-market, single-currency local Chinese systems. QDII managers are now looking to experienced international technology providers, such as Charles River, to advance their investment operations in line with industry best practices.
One of China's largest asset managers is currently implementing Charles River IMS across its domestic business operations, including: equity; fixed income; and money market assets; with interfaces to a number of in-house, domestic and international platforms.
Charles River IMS, available with full Chinese language capability, streamlines processes from decision support through to settlement notification, helps set up workflows to manage a complex set of domestic and international instruments and portfolios, and offers tested compliance rule libraries across 35 international regulatory frameworks.
The Charles River Network is also extending its footprint into China with the certification of leading Chinese brokers – a trend expected to grow strongly over the mid-term, as many existing Charles River IMS clients use the FIX (Financial Information eXchange) Protocol to trade Chinese A-shares electronically. The FIX Protocol is gaining momentum in China not only through the QFII managers investing into China, but also the QDII managers investing internationally. In addition, many Chinese brokerage firms and the stock exchanges are upgrading their technology to support the FIX Protocol through the STEP 1.0 variant that is adapted for the Chinese market.
For more information about Charles River’s products and services in China, please contact Mark McBurnie, Sales Executive, +61 400 016 188 or MarkMcBurnie@crd.com.
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