Qualified Domestic Institutional Investor

Qualified Domestic Institutional Investor (simplified Chinese: 合格境内机构投资者; traditional Chinese: 合格境內機構投資者; pinyin: Hégé Jìngnèi Jīgòu Tóuzīzhě), also known as QDII, is a scheme relating to the capital market set up to allow financial institutions to invest in offshore markets such as securities and bonds. Similar to QFII (Qualified Foreign Institutional Investor), it is a transitional arrangement which provides limited opportunities for domestic investors to access foreign markets at a stage where a country/territory’s currency is not traded or floated completely freely and where capital is not able to move completely freely in and out of the country.

In People's Republic of China, QDII allows investors to invest in foreign securities markets via certain fund management institutions, insurance companies, securities companies and other assets management institutions which have been approved by China Securities Regulatory Commission ("CSRC").

On 13 April 2006, the Chinese government announced the QDII scheme, allowing Chinese institutions and residents to entrust Chinese commercial banks to invest in financial products overseas. But the investment was limited to fixed-income and money market products.

After granting 15 banks and funds a total quota of US$14.2 billion to invest overseas, the Chinese government announced on 11 May 2007 to widen the scope of the QDII investment. With certain restriction, banks can now offer related products. The net value of a QDII product investing in stocks must not exceed 50%, with the net value represented by a single stock capped at 5%. The minimum commitment by each client is 300,000 yuan. Also, the stocks invested or the fund linked must be listed on or approved by the area that have signed memorandums of understanding with the CSRC.

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Wikipedia