The 2024 edition of the Shanghai Guidebook for Overseas Asset Manager has been released, featuring significant updates under the guidance of the Financial Commission Office of the CPC Shanghai Municipal Committee, the China Securities Regulatory Commission Shanghai Office, and the Asset Management Association of China. This latest version reflects the newest policy directions and investment environment, continuing to provide critical insights and practical guidance for foreign asset managers.

The guidebook was first launched on March 31, 2020, just before China lifted restrictions on foreign ownership in securities and public fund management companies. Updated annually over the next three years, it offers detailed information on legal, regulatory, and tax policies relevant to foreign asset managers, along with key industry data specific to Shanghai.

The 2024 edition of the guide includes several key highlights:

1. Progress in capital market internationalization

> Enhanced cross-border investment: Updates include improvements to the Mainland-Hong Kong Mutual Recognition of Funds and Shanghai-London Stock Connect programs, broadening access to Chinese markets for global investors.

> Expanded capital management programs: Cross-border investment options for Qualified Foreign Institutional Investor (QFII), RMB Qualified Foreign Institutional Investor (RQFII), and Qualified Domestic Institutional Investor (QDII) have been expanded, while the Cross-border Interbank Payment System (CIPS) is further developed to facilitate RMB payments.

> Bond market and FDI growth: New data shows China's rising foreign direct investment and expanded interbank bond repo markets, reflecting increased global engagement.

2. Regulatory and self-regulatory updates

> 2023-2024 regulatory frameworks: Key documents, such as Strengthening Regulation, Preventing Risks and Promoting High-quality Development of the Capital Market (new "Nine Articles of the State Council") and new policies from the Shanghai Municipal Government, support market stability and growth.

> Private fund rules: The guide outlines updates to private fund registration and operations, promoting efficiency in fund management through revised rules from the Asset Management Association of China.

3. Innovation and financial development

Shanghai continues to lead China's financial innovation, with several major developments such as launching the Action Plan of Shanghai to Adhere to Benchmarking Reform and Build a World-Class Business Environment (Action Plan 7.0) and the Shanghai Green Finance Service Platform.

Shanghai's financial sector growth is evident, with 1,771 licensed institutions, over 30 percent foreign. Major foreign-owned funds, such as AllianceBernstein Fund Management and Allianz Fund Management, have launched operations in the city. As of June, 92 firms had been part of the Qualified Foreign Limited Partners (QFLP) pilot program.

4. Shanghai fund management sector

As of mid-2024, Shanghai leads China in fund management in terms of both public and private funds:

> Public funds: With 76 firms and 4,724 products, managing 14.82 trillion yuan ($2.08 trillion) in assets.

> Private funds: The city hosts 3,842 managers with 4.92 trillion yuan in assets under management. Of the top 96 private securities fund managers in China, 46 are based in Shanghai.

Source: Financial Commission Office of the CPC Shanghai Municipal Committee