CHINA AND HK REGULATORS AGREE OVERSEAS INVESTMENT RULES

The insurance regulator of China and Hong Kong’s securities watchdog are set to introduce new supervisory rules concerning the overseas investment activity of the mainland’s insurers. The agreement between the China Insurance Regulatory Commission (CIRC) and the Securities and Futures Commission of Hong Kong is intended to encourage the development of the recently introduced Qualified Domestic Institutional Investor scheme. One effect of the new rules is that insurers will be able to convert their yuan-based assets via foreign exchange to enable investment in international equity markets. As of July 2007 the CIRC has allowed insurers to invest 15% of their assets overseas but has also restricted the ability to invest in international equity markets to just nine insurers.