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Ambassador Steinmetz Quoted in Ignites Asia
Luxembourg to join RQFII scheme soon: Ambassador
Article published on March 10, 2015
By Lydia Guo
Luxembourg expects to be granted a renminbi qualified foreign institutional investor (RQFII) quota soon, Paul Steinmetz, the ambassador for the Grand Duchy of Luxembourg’s embassy in Beijing, said Monday at a seminar in Hong Kong.
Luxembourg’s RQFII quota will be the same as the quotas awarded to Paris and Frankfurt, he said during a brief opening speech at the Elvinger, Hoss & Prussen (EHP) Annual Luxembourg Investment Fund Seminar.
Paris and Germany were each granted Rmb80 billion (US$12.7 billion) in RQFII quotas in March and July 2014, respectively. The RQFII programme was introduced in Hong Kong in December 2011 and was extended to 10 markets with a total quota of Rmb920 billion (US$147.1 billion).
Switzerland was the latest market to be included in the RQFII programme. The others are Australia, Canada, Qatar, South Korea, Taiwan, Singapore and London.
ICBC Luxembourg was appointed as the renminbi clearing bank in Luxembourg last year, and it currently handles an average of Rmb7 billion (US$1.1 billion) to Rmb10 billion (US$1.59 billion) per day, Steinmetz said.
The Luxembourg government has been in talks with the Chinese government for the RQFII quota for around 18 months, as Luxembourg wants to become the offshore renminbi centre after Hong Kong, according to a source with direct knowledge of the talks who declines to be named.
ICBC Luxembourg launched its renminbi clearing services in December last year after it was appointed as a renminbi clearing bank in September 2014, the source says.
The operation of a renminbi clearing bank in Luxembourg paves the way for the RQFII quota and offshore renminbi business, the source says, adding that a ministerial level visit by the Luxembourg government to China is being planned, with the RQFII quota expected to be announced on or before the visit.
Luxembourg has positioned itself as a potential offshore renminbi hub. The pool of renminbi deposits held by banks in Luxembourg reached Rmb67.2 billion (US$10.7 billion) in the first half of 2014, and the renminbi assets held within Luxembourg-domiciled funds reached Rmb238.2 billion (US$38 billion) in the same period, according to information from Luxembourg for Finance.