City Minister Andrea Leadsom today (25 March 2015) welcomed a major next step in making Britain the most important market in the western world for the Chinese currency, the renminbi (RMB).
The government welcomed the announcement by China Construction Bank International (CCBI), which is China's second largest bank, that it has launched a landmark new fund on the London Stock Exchange.
The fund is the first of its kind in Europe and is being launched in collaboration with HSBC and Commerzbank. The fund, which can be traded in sterling, euros or RMB, will be domiciled in the UK. This follows close collaboration between CCBI and the government as part of the government's Investment Management Strategy - announced in 2013 - which aims to further cement Britain's position as the centre for global finance by encouraging more of these types of funds to be launched here.
City Minister Andrea Leadsom said:
The launch of this innovative new product, which will provide further opportunities for British and other global investors to invest directly into China, underscores Britain's position as the western centre for offshore RMB and a global centre for asset management.
It's also yet another example of the good relationship between Britain and China, building on last September's Economic and Financial Dialogue where our two countries agreed the most significant package of measures ever on financial services.
And it's testament to our commitment to investment management. When the government launched the UK's Investment Management Strategy in 2013, it was our intention to make the UK a major jurisdiction for fund domicile. So I am particularly pleased that CCBI has chosen to domicile this ground-breaking fund in the UK.
Dr. Hu Zhanghong, CEO of CCBI said:
The launch of this RMB denominated exchange traded RQFII money market fund is the latest of the important steps CCB International is making to accelerate its internationalisation and the globalisation of the RMB and testament to our ongoing commitment to London and the UK.
Thanks to the strong support from the British government, Chinese government, CCB Group and other working partners, CCB International is keen to play a bridging role to marry economic development and financial cooperation between the UK and China, and to contribute to the building of this offshore RMB centre.
Sue Langley CEO of the UKTI Financial Services Organisation, said:
UK Trade & Investment Financial Services Organisation acts as a single portal to assist asset managers wishing to set up or establish a presence in the UK.
The UK government is committed to strengthening the UK's position as a destination of choice for investment managers, not just for management but also as the domicile of choice. Under strategic direction from the HM Treasury led Financial Services Trade and Investment Board (FSTIB), UK Trade & Investment (UKTI) is working together with HM Treasury and industry to extend the promotion of the fund management industry overseas, and provide hands-on, practical assistance to fund managers wishing to establish a presence in the UK.
CCBI's fund is the first UK domiciled RMB Qualified Institutional Investor (RQFII) Exchange Traded Money Market Fund on the London Stock Exchange
This exchange traded money market UCITS fund will use China's RQFII scheme to invest into the Chinese Interbank Bond Market (CIBM).
The launch of the fund builds on the measures the government has already taken as part of its Investment Management Strategy, including the removal of stamp duty and stamp duty reserve tax on purchases of shares in exchange traded funds that are domiciled in the UK, which has opened the door for UK exchange traded funds to launch in London for the first time.