QFII System's Development And Regulation In Our Country

Firstly, this paper introduced the development and background of QFII, and analyzed the investing behavior of QFII in China currently and its backwards, and flaws of supervision. It has learnt from experience in supervising stock market in developed countries and areas, and made its own strategic advices specifically to backwards in QFII framework and supervision.In 2009, the quantity and amount of investments which get approvals from China has reached the top in history, and the stock share of QFII in the second season had been rising, and all these prove that given the financial crisis, QFII still focuses on the capital market of China, and shows great enthusiasm and willingness of participation, which states that QFII has great confidence in the further economy development of China. However, at the same time, we should notice that, we can not blindly facilitate the pace of implementation of QFII just because of this enthusiasm rather than paying attention to the supervision and restriction of QFII.Through the analysis of specific QFII investment behavior, we found that QFII prefer the stock with stable performance and related with crucial industry. This should draw attention of supervision bureau, and we should limit the inflow of QFII or limit the proportion of QFII introduced to the crucial and economy safety related industries. Meanwhile, this paper pointed out the problems and backwards made in the seven-year development process of QFII, such as the rent of the QFII quotas, investment concentration, etc., which denotes our inabilities in supervision. We should enhance the supervision of cash flow of QFII and specific exchange behavior, and all of these need fully utilizing of frontier service departments such as QFII agency and stock exchange market, so that supervision bureau can learn and master the exchange behavior of QFII timely and accurately, and take effective measures to stop and punish the illegal events, and meanwhile revise and add the inappropriate rules and regulations in QFII framework, to improve the regulation and supervision system.However, our QFII trusteeship system exists the problems such as inappropriate proportions, less rights of stock markets, etc.. Thus, all these prevent them from helping and supervising more effectively. Hence, we raise the strategy that we should positively encourage the development of Chinese trust bank, and should focus on the ethics preach, establish trust responsibility, and train a cluster of trust banks with national responsibility, honesty and high effectiveness; besides, allow the stock markets to enjoy their rights, especially in the supervision to QFII broker. We should establish identical supervision system, to make the stock exchange market take the responsibility of regulating QFII while making profits.For the reason that most of the introduced QFII comes from the multinational financial corporation, if we want to learn more about its profit situation, learn about their investment philosophy and behavior, and to supervise effectively, it's not enough to rely it solely on our own information, which denotes that we should seek for international cooperation. However, our country is not doing very well in international cooperation. Hence, we raise the information sharing strategy, and establish the international supervision system specifically to multinational financial corporation. We should positively participate and facilitate the development of international cooperation to get more information, so can supervise QFII better and more effectively.To implement QFII is the definite choice since the stock market chooses to open in China and we insist on deepening the policy of reform and opening up. But our mechanism design and the supervision should go with its development and the behavior of investment bank. Only by doing so can QFII have positive influence in the capital market in China, and eventually broaden and strengthen the capital market in China.