China eases restrictions for foreign institutional investors

BEIJING (Reuters) - China on Tuesday adjusted rules to make it easier for qualified foreign investors in Chinese stocks and bonds to move money out of the country, in Beijing's latest step to open up its capital markets.

China's forex regulator said it will scrap the 20 percent monthly repatriation limit under the dollar-dominated qualified foreign institutional investor (QFII) scheme, and will remove lockup periods for investment principal under QFII and its yuan-denominated sibling scheme, RQFII.

The move came less than two weeks after U.S. index publisher MSCI included over 200 China-listed shares into its emerging market benchmark on a partial inclusion factor.

"This is in line with China's general policy of opening-up, and could help shorten the process toward China's full inclusion into MSCI," said Ivan Shi, head of research at fund consultancy Z-Ben Advisors, adding that issues with accessibility and repatriation have been a key source of frustration for overseas investors.

According to rules published by the State Administration of Foreign Exchange (SAFE), effective immediately, investors under QFII and RQFII, will also be allowed to conduct foreign exchange hedging in China.

(Reporting by Samuel Shen and Beijing Monitoring Desk; Editing by Richard Borsuk and Sam Holmes)