Article

CFCL Investment regulation - China

Reference

Last Updated
28.04.2025

Regulatory structure

Please refer to the CBL Market infrastructure - China for the complete information about the regulatory structure.

Holding restrictions

Disclaimer

The information contained in the Holding Restrictions is based on the legal opinion obtained by CBL that was issued on 27 February 2019. CFCL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Holding Restrictions do not constitute legal advice and clients should seek advice from independent professional counsel.

Clients are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless CFCL for any loss, expense, liability, damage or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.

Holding restrictions – Register market

Restrictions on customers

For the Southbound funds under the Mutual Recognition of Funds (MRF), only eligible Hong Kong institutional investors can invest in the funds. Clearstream Fund Centre customers will need to be recognised as licensed distributors in Hong Kong and register for the 3-digit CSISC agent code.

Restrictions on currency

At Clearstream Fund Centre, the official ISO currency code “CNY” must be used in all transactions regardless of where the transaction takes place, even though there are several codes for the same Chinese Yuan, such as the CNH in Hong Kong, CNS in Singapore, RMB as a general abbreviation for “Renminbi”. Customers are advised that instructions placed in CNH, CNS and RMB will not be able to settle.

Restrictions on settlement

There is no general restriction on settlement for Southbound funds through Clearstream Fund Centre. However, certain funds may impose specific settlement/transfer restrictions. Customers must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions.

Holding restrictions – CSD market

The securities market is not freely open to foreign investors:

  • Open and close-end funds, listed open-end fund and ETFs approved by CSRC are only available for QFIIs (Qualified Foreign Institutional Investor).

Please refer to the CBL Investment regulation - Hong Kong for more information about the holding restrictions.

Qualified Foreign Institutional Investors (QFI)

Please refer to the Clearstream website for the complete information about the QFI.

Disclaimer

The information contained in the Holding Restrictions is based on the legal opinion obtained by CBL that was issued on 27 February 2019. CFCL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Holding Restrictions do not constitute legal advice and clients should seek advice from independent professional counsel.

Clients are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless CFCL for any loss, expense, liability, damage or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.

Introductory information and categories​

This section provides general information about the disclosure requirements for fund securities holdings with which Clearstream Fund Centre must, according to the information available at the time of the present publication, comply with each of the domestic markets and fund markets covered by the Disclosure Requirements.

Fund securities that are held remotely are usually not disclosed by CFCL. A disclosure request received by CFCL regarding such a holding will be forwarded to the relevant client without assessing its validity and the CFCL Client shall handle the request on a voluntary basis.

Disclosure requirements are only available for those countries where CFCL has a link to the respective domestic market or direct access to local domiciled funds that are held in Clearstream’s name on the register.

For fund securities holdings where CFCL has no such link or direct access to the register, clients must be aware that local laws might provide for mandatory disclosure. A disclosure request in this regard will be forwarded to clients without assessing its validity. Clients commit not to unreasonably withhold their consent to such a request and agree to indemnify CFCL for damages resulting directly from non-compliance with mandatory local disclosure requirements.

In most cases, the obligation to disclose is based on the domestic equivalent of a Companies Act, relevant investment funds act or anti-money laundering act and covers all security types.

In some instances, the obligation to disclose is based on stock exchange laws or regulations and only applies to listed domestic and foreign securities.

The Disclosure Requirements do not constitute legal advice and the Clients should seek independent professional advice in relation to fund securities deposited with CFCL, especially as, for those jurisdictions in which no disclosure obligation falls on CFCL, there may be separate disclosure requirements that apply directly to clients of CFCL, shareholders and beneficial owners.

Please note that CFCL is not always given comprehensive information or advised of changes affecting local disclosure requirements.

It remains the sole responsibility of the Client to ensure compliance with local disclosure requirements. If a requirement is not met, it is the Client who will be liable to any related penalty. Clients are therefore advised to seek independent legal advice on the existence and interpretation of local disclosure requirements.

In the case of a discrepancy between the general information contained in this document and the information provided by CFCL for a specific market, as applicable (irrespective of whether this information has been obtained from an agent of Clearstream Fund Centre, or, as the case may be, a foreign regulator of a branch of CFCL), the information provided by CFCL for the specific market as applicable, shall prevail.

N.B.: In all countries, if it is suspected that a disclosure obligation has been breached (for example, that a threshold of holdings under custody has been crossed without being reported), the regulators and the authorities may have the power to investigate. Moreover, in all countries, disclosure obligations might be triggered by enforceable judgements of the competent jurisdiction of the country in question.

Category 1

Markets where disclosure by Clearstream Fund Centre to issuers, investment fund managers and/or to regulators or market authorities is mandatory under applicable law;

Category 2

Markets where disclosure by Clearstream Fund Centre of account holders to issuers, investment fund managers and/or foreign regulators or market authorities is a legal obligation in respect of fund securities in specific circumstances;

Category 3

Markets where there is no obligation for Clearstream Banking acting as custodian for Clearstream Fund Centre to disclose account holders to issuers, investment fund managers and/or regulators, notwithstanding any disclosure requirement falling directly on clients of Clearstream Fund Centre, shareholders and/or beneficial owners or notwithstanding disclosure necessary to obey an enforceable judgement of the country in question.

Disclosure requirements – CSD Market

Disclosure Category: 1

Disclosure by Clearstream Fund Centre S.A. (“CFCL”) to regulators or market authorities is mandatory under the terms of the Securities and Future Ordinance (the "Ordinance"), Section 181.

Clearstream Fund Centre may be required, under the terms of the Securities and Futures Ordinance (the “Ordinance”), Section 329, to disclose, upon request, to issuers of securities listed in Hong Kong, the identity and holdings of clients.

Clearstream Banking may be required, under General Rules of CCASS section 824 (Charter 8), with HKSCC as the nominee holder, to disclose, upon request to relevant China authority/ChinaClear on listed Mainland China shares via the Stock Connect programme, the identity and holdings of clients.

Consent

Clients holding shares tradable in Hong Kong and/or via the Stock Connect programme, consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, the listed company or its agent) as their attorney-in-fact, under power of attorney, to collect from Clearstream Fund Centre such information as is required to be disclosed. Clients who do not want to grant such authority to Clearstream Fund Centre should refrain from holding such shares in their account with Clearstream Fund Centre.