A Qualified Domestic Institutional Investor (QDII) is an institutional investor who meets the requirements for investing in securities in foreign markets.
QDII programs were launched in China in 2006 and allow five types of Chinese entities to invest abroad: insurance companies, banks, trust companies, funds and securities firms.
Entities who wish to participate in the QDII program must first obtain approval from the State Administration of Foreign Exchange of China (SAFE), which is also responsible for setting the investment quota amount allowed to each participant.
Once approved, organizations are allowed to invest in foreign markets both for themselves and on behalf of retail clients.
Firms can invest in equities, fixed income and derivatives in certain overseas markets.