(Yicai Global) March 7 -- After Mark Mobius, co-founder of Mobius Capital Partners, said he was unable to transfer personal funds overseas from the Shanghai branch of UK-based lender HSBC Holdings, some market participants became concerned that the issue could be related to China's qualified foreign institutional investor program.
But Yicai Global has learned from bankers, including some at HSBC, that the failed transfer had nothing to do with the QFII program. It may have resulted from the lender's daily transaction limit on individual accounts, usually USD50,000, or to risk control procedures for outbound funds.
Mobius told Fox Business on March 2 that the billionaire investor was unable to get his money out of China as the government was restricting the flow of funds from the country.
“We cannot comment on the situation of our customers,” a spokesperson for HSBC China told Yicai Global. “But what needs to be clarified is that our bank has not received any requests from Chinese regulators to restrict the repatriation of funds, nor have we been informed of any recent policy change on cross-border fund repatriation.
“Similar to the situation in various countries, commercial banking business must follow certain procedures and meet internal control requirements,” the person added.
The funds in Mobius' Shanghai account were the proceeds of a property sale, he later told the Hong Kong Economic Journal. He wanted to transfer the money to his HSBC account in Hong Kong.
The issue has now been resolved, Mobius said yesterday, without disclosing any further information, Ming Pao reported today.
Under Chinese regulations there are three legal ways for foreign capital to enter the Chinese mainland stock market: the QFII program, strategic investments in listed companies, and foreign direct investment during listings.
QFII funds theoretically have no problems with overseas transfers, Yicai Global learned from legal experts and investors. Before 2018, international entities investing in the Chinese stock market through the QFII program could redeem capital equal to no more than 20 percent of the previous year's net asset value every month. But the policy was canceled in 2018.
Mobius is the former executive chairman of the emerging markets team at US asset manager Franklin Templeton. During his tenure, he repeatedly expressed a bullish attitude toward the Chinese stock market. He worked at Franklin Templeton for 30 years before retiring in January 2018.
His opinions do not reflect the views of Franklin Templeton in any way, the firm told Yicai Global.
“Franklin Templeton's long-term commitment to China, an important strategic market for the company, remains strong, both over the past two decades and now,” the California-based firm said. ”Franklin Templeton has always sought to seize opportunities in China's economic development,” it said. “As the opening up of the Chinese market continues to advance, we will keep investing in the Chinese market.”
Editor: Futura Costaglione