Foreign banks stalled on QDII

The China Banking Regulatory Commission has put applications from foreign banks to become qualified domestic institutional investors (QDII) on hold until it issues further guidelines, the South China Morning Post reported, citing banking sources. Some Hong Kong banks were asked not to submit applications, while the Bank of East Asia's submission some weeks ago might be returned, the sources said. The QDII scheme allows designated financial institutions to invest funds from the mainland in overseas markets as part of Beijing's policy to gradually open its capital account. Rules announced last month for commercial banks, securities houses and fund management firms on investing clients' funds outside China are widely believed to also apply to overseas firms.