[Direct answer]It is possible to invest, but the scope is limited by the current access list and quota management, and not all products in the domestic market are open. After obtaining the qualification, qualified foreign investors can, with the assistance of the custodian, open securities accounts and RMB dedicated deposit accounts to invest in standardized products such as stocks, bonds, securities investment funds, and stock index futures that are legally issued or traded in China. They can also participate in qualified bond repurchase and financial derivatives. As for whether a specific transaction can be placed, it depends on three constraints: whether the proposed investment product is within the permitted investment scope, whether the foreign shareholding ratio of a single security exceeds the limit, and whether the capital remittance and account usage comply with the registration guidelines. If all three meet the permitted range, the transaction can be settled normally; otherwise, the custodian will usually intercept it at the front end. Therefore, the answer is not a simple yes or no, but a list of items compared one by one.

1. Problem background and typical scenarios

When foreign institutions enter the domestic securities market, they usually first obtain the qualification of a qualified foreign investor, then select a domestic custodian, who handles securities accounts, RMB dedicated deposit accounts, and fund transfers on their behalf. After the three qualifications, quotas, and accounts are in place, the real focus of repeated questioning is what exactly the funds in the account can be used to purchase. The scenarios generally fall into three categories: 1. **Allocative institutions** such as foreign pension funds, sovereign wealth funds, and insurance funds, which focus on whether domestic stocks and bonds can be included in their portfolios, the maximum proportion of a single asset they can hold, and how dividends and interest can be remitted. 2. **Trading institutions** pay attention to the range of derivatives and hedging tools they can participate in, the opening limits for stock index futures, and whether bond repo transactions are allowed. 3. **Group clients** with multiple products registered separately are concerned about whether quotas can be flexibly allocated across different products, whether accounts can be shared, and whether changes in investment direction require re-filing. What often complicates the issue is not the product name itself, but the boundaries of the same product under different frameworks: for example, the admission requirements for stocks on the main board, ChiNext board, and STAR Market may not be specified in the same document; similarly, bonds in the interbank and exchange markets have different participation methods and settlement paths. Added to this are foreign ownership limits, prohibitions on investing in sensitive industries, short-term trading thresholds, and information disclosure requirements. A seemingly short list of investible products must be cross-referenced with multiple sets of rules at the implementation level. Another common scenario arises on the funding side: funds have been transferred to dedicated accounts, but orders cannot be placed because the intended bidding item is not within the permitted scope, or purchases are later found to exceed shareholding limits and require timely disposal. Such passive situations often stem from failing to verify the product, proportion, and account simultaneously before placing orders.

II. Key points of contention

Disagreements typically arise along three lines, each requiring verification of different materials. The first line concerns whether the asset class is within the scope of investment. The list of permitted investment assets is subject to adjustment based on the pace of market liberalization and is issued by regulatory authorities. Assets not included in the old list cannot be applied for simply because similar products have been liberalized. Disagreements often arise over new instruments, such as certain asset-backed securities, depositary receipts, or newly listed futures products. Institutions argue that these should be considered standardized securities, while custodians insist on clear inclusion criteria. A prudent approach is to compare each proposed investment with the current list and retain the comparison records, rather than making decisions based on similar product names. The second line concerns whether the investment ratio exceeds limits. Foreign investors are subject to restrictions on their holdings in individual listed companies, and there are also caps on aggregate foreign ownership. If the warning line is breached, the trading system may restrict further purchases, and excess holdings must be disposed of within a specified timeframe. The key issue is how to calculate the ratio: whether related parties, different products under the same group, or positions held through different channels should be consolidated for calculation. Different interpretations can lead to vastly different conclusions, so it's essential to clarify and document the consolidation rules before making investments. The third line concerns whether funds and accounts comply with regulations. The scope of transactions in RMB dedicated deposit accounts, the path of foreign exchange conversion and purchase, and the limits and frequency of principal and income repatriation are all tied to the declaration made during registration. Even if the asset class itself is eligible for investment, funding-related issues may still arise if they deviate from the declared scope. At the contractual level, the rules on performance and account management in the Civil Code of the People's Republic of China (effective January 1, 2021) and the requirements for cross-border fund registration in the Foreign Exchange Management Regulations of the People's Republic of China (amended on August 5, 2008) serve as two key references for resolving such disputes. For foreign institutions entering the Chinese market, the Foreign Investment Law of the People's Republic of China (effective January 1, 2020) also governs foreign investment management. Only after addressing each of these three issues can the investible list become operational in practice.

III. Professional analysis by Hengluo Lawyers

When reviewing an investment list, case handlers typically start with subtraction and then proceed to addition: first, they cross out clearly excluded items, such as varieties not included in the current list, targets involving sensitive industries or restricted investment lists, and non-security-related expenses outside the account's intended use; then, within the remaining scope, they annotate each item with the applicable conditions, including required amounts, the custodian channel through which orders are placed, maximum percentage limits, and the disclosure trigger threshold. Starting with subtraction and then proceeding to addition makes it less likely to miss items than starting with an all-inclusive approach and gradually excluding items. For verification, the most reliable method is tripartite consistency: regulatory lists, custodian agreements, and actual account transactions must all point to the same conclusion. The list specifies whether a product is allowed, the custodian agreement clarifies the channel and operating methods, and the transaction records show where the funds actually went. If there are discrepancies among these three documents, the official list and registration receipts are typically given precedence over internal investment memoranda. By placing these three documents side by side, discrepancies can often be identified at a glance. Disagreements between institutions and custodians often center on list versions and percentage thresholds: institutions tend to emphasize that the product has been approved, funds have been legally deposited, and similar institutions have conducted similar operations, thereby arguing that individual transactions do not require further verification. Custodians, however, focus on whether the list version, merged calculation standards, and declared purposes are consistent, maintaining that approval of qualifications does not automatically guarantee compliance with every transaction. For verifiable materials, the focus is on list provisions, account receipts, and shareholding ratio statements, rather than oral conventions. For evidence types: - Qualification-related materials: approval documents, qualification certificates, and applicable list versions. - Account-related materials: account opening receipts, RMB dedicated deposit account transaction details, foreign exchange and remittance receipts. - Transaction-related materials: trading orders, trading returns, and portfolio and shareholding ratio statements. - Agreement-related materials: custodian agreements, investment management contracts, and supplementary clauses. For extended issues involving cross-border funds and qualified investor arrangements, it is advisable to review them in conjunction with the current list version and custodian agreements.

IV. Practical suggestions and legal basis

The preparation process should revolve around a checklist, with each column corresponding to a category of verifiable materials. After completing the checklist, proceed to the next step of placing an order. **First column**: Fill in the product type. Write the standard names for each proposed investment target, and indicate whether they are included in the current permitted investment scope, the version and release date of the relevant documents, and any special conditions such as position limits or holding periods. Use standardized names instead of internal abbreviations to avoid mismatches during cross-checking with reference lists. **Second column**: List the proposed holding ratios for each security, the combined ratios with concerted parties or other products in the same group, and the early warning lines and upper limits for total foreign investor holdings. It is advisable for the custodian to provide guidelines and retain a calculation record to avoid retroactive checks when limits are exceeded. **Third column**: Specify the currency of fund transfers, the RMB-dedicated deposit account, the paths for foreign exchange conversion and purchase, and the limits and frequency of principal and income withdrawals. Verify that these comply with the registration and reporting requirements. **Fourth column**: Include records of reference list comparisons, custodian agreements and supplementary clauses, trading orders and settlement reports, shareholding ratio statements, and account transaction details, archived in chronological order. The contractual validity and performance assessment are governed by the provisions of the custodian agreement and investment management contract. Once all four columns are completed, the investible list transitions from a verbal statement to a verifiable document.

5. Henglu Law Firm's Advice

There are several details that require attention in advance to save effort rather than dealing with them afterward. The version is the most prone to errors: the types and proportions of investments allowed may adjust according to the pace of opening up. The previous edition of the list may not be the current one. Before launching a new strategy, first confirm whether the documents in hand are the current valid versions, and record the confirmation date in the draft. Keeping records is more reliable than verbal confirmation: the guidelines provided by the custodian, front-end interception prompts, and over-limit disposal notifications are all worth archiving separately. Once there are disputes about whether a transaction is compliant, these records can better explain the basis for judgment at that time than relying on recollections afterward. The quota and investment direction must match: if multiple products under the same management are registered separately, it's not appropriate to assume that the quotas can be adjusted among them or that the accounts can be shared. When there are substantial changes in the investment direction, first confirm whether additional reporting is required before implementation. Breaking down whether a purchase is allowed into three questions—type, proportion, and account—and answering each question before placing an order can greatly reduce the occurrence of passive disposal situations.

VI. Frequently Asked Questions

Q1: If a foreign institution purchases shares of the Science and Technology Innovation Board through QFII, does this count as a product listed in the Access List?

Is it considered as such? Whether it is included in the current list is the decisive factor. It cannot be inferred based on the similarity of the sector name. Innovative Board stocks are shares legally issued in China, and they generally fall into the category of allowable investments. However, when it comes to a specific target, three criteria must be checked simultaneously: whether it is within the scope specified in the current list, whether it exceeds the foreign investment holding limit for a single security, and whether the issuer is involved in sensitive industries that are prohibited from investment. Only if all three criteria are met can the stock be considered an investable item on the list. If any of the criteria are not met, orders should be stopped immediately. The list is updated in accordance with the pace of market opening. When making investment decisions, the version in effect at the time of placing orders should be used, and a comparison record should be kept. The rules on transaction execution in the Civil Code of the People's Republic of China (effective January 1, 2021) apply to the contractual level. Being included in the list does not automatically mean that funds can be released. It is more reliable to compare the standard abbreviations and codes of the stocks you plan to bid on one by one and then entrust the custodian to execute the transaction, rather than making judgments based on your impression.

Q2: When applying for QFII qualification, how many copies of the custodian agreement and the securities and futures business license need to be submitted?

The number of copies is calculated separately according to the requirements of the accepting authority and the custodian. Generally, two sets of materials are needed for the qualification application and account opening respectively. For the qualification application, the materials typically include an application report, qualification certificates, audited financial statements, a license to engage in securities and futures business, a draft of the domestic custodian's intention or custody agreement, and a description of compliance and internal control systems. For account opening, additional materials include an account opening application, authorized signatory documents, information about the RMB dedicated deposit account, and anti-money laundering identity materials. The names, dates, and subjects in the two sets of materials must be completely consistent, and the copies should be stamped with confirmation consistent with the originals. In practice, materials being returned for correction are often due to the license's expiration date approaching, financial statements not being the most recent period, or the signing level of the authorization documents not conforming to the company's bylaws, rather than an insufficient number of copies. It is recommended to first obtain a list of current materials from the custodian, prepare all materials in three columns (originals, copies, and whether certification is required), and submit them in one go to avoid making multiple corrections.

Q3: When conducting compliance review of the investment scope for overseas funds, do lawyers quote their fees based on the asset scale or on an hourly basis?

Both types of quotes are common, but the difference lies in whether the boundaries can be clarified at once. According to the asset size tiering, it is suitable for situations with fixed scopes where only a compliance opinion is needed for the existing portfolio. The fees fluctuate according to the asset tiering of the trust management. According to the hourly accumulation, it is more suitable for work such as comparing the list version by version, checking multiple products separately, and cooperating with multiple rounds of inquiries, with settlement based on the actual hours invested. Regardless of the type, a written quote specifying the scope of services should be obtained before entrustment: whether it includes updating and tracking the list, communicating with the custodian, or reviewing subsequent disposal of over-limit assets. If the dispute eventually leads to litigation, the case acceptance fee paid to the court shall be accumulated separately according to the "Measures for the Payment of Litigation Fees" (implemented on April 1, 2007), and shall be listed separately from the aforementioned service fees, not combined into a total amount. List the number of investment products, product types, and verification rounds before discussing the price. Only then can the two types of quotes be comparable.

Q4: After the custodian submits the quota filing, how many working days does it take for the Foreign Exchange Administration Bureau to complete the registration of foreign exchange inflows and outflows?

The completion time shall be subject to the deadline specified in the receipt of acceptance. It is advisable to arrange the process in reverse order and include the handling of overseas documents. The filing of quota and the registration of remittance and withdrawal are calculated based on working days. Applications with complete materials and consistent declaration purposes are processed faster; those requiring supplementation or involving the consolidated explanation of multiple products will have a correspondingly longer processing period. What usually takes up most time is not the registration process itself, but the retrieval of overseas entity's proof documents, the verification by authorized signatories, and the comparison between the account transactions and the declared purposes. These steps should be completed before submission. The process can be divided into three stages for time estimation: the internal review by the custodian, the acceptance by the registration authority, and the return of the account receipt. Each stage should have a buffer period. If there are subsequent changes to the registration items, the change registration should also be included in the time budget, and not follow the cycle of the first-time handling. Keep a separate column for the receipt date of each receipt, which can be used directly for checking whether the deadline has been exceeded in the future.

Q5: On the day of the bid, how should I compare each item with the access list one by one? Which escrow confirmation letter should I start keeping from?

Today, we will first conduct a comparison and then determine the starting point for record-keeping. If we reverse the order, it's easy to end up doing all the work for nothing. List the standard abbreviations and codes of the proposed bids in a table, and check them against the current list item by item, marking three statuses: included, not included, and pending confirmation. This step can help us screen out products that clearly exceed regulatory limits before placing orders. After completing the comparison, we should start keeping records from the confirmation letter on investment scope issued by the custodian, as it simultaneously records the list version, investable products, and channel specifications. This will serve as the starting point for explaining our judgment at that time in the future. First, fix the current list version and acquisition date, then generate a comparison table for the proposed bids, and finally request the confirmation letter from the custodian. If we reverse the order, there will be no time anchor point for record-keeping. After all three materials are in place, we can then discuss quota and ratio calculations, ensuring a complete material chain.

The above answer is based on the judicial practice in the Beijing area. The adjudication guidelines in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials to avoid missing the statutory time limits. →Financial capital legal services·Beijing Hengluo Law Firm

Disclaimer: This article is compiled based on current laws and regulations and publicly available adjudication rules. It is for general reference only and does not constitute formal legal advice on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer promptly.