The Monetary Authority of Singapore (MAS), the city state's central bank, said on Friday that it has opened applications for Renminbi Qualified Foreign Institutional Investor (RQFII) license for local eligible financial institutions.
The license will enable the financial institutions to offer RMB investment products and invest offshore RMB into China's securities markets.
The MAS said in a statement that all Singapore-incorporated financial institutions that are approved by them to conduct fund management activities may apply for the license.
The applications are to be made to the China Securities Regulatory Commission (CSRC) via approved custodian banks.
China and Singapore agreed to extend the RQFII program in the city, with an aggregate quota of 50 billion yuan (8.3 billion U.S. dollars), during Chinese Vice Premier Zhang Gaoli's visit last October.
In the opposite direction, the two sides also agreed at that time to launch the pilot scheme of Renminbi Qualified Domestic Institutional Investor (RQDII) in Singapore "when it is the right time."
The scheme will allow qualified Chinese institutional investors to use RMB to invest in Singapore's capital markets.
They also agreed to introduce direct currency trading between the yuan and the Singapore dollar, with further details expected to be announced separately.
Singapore has been pursuing a role as one of the offshore RMB centers. The local units of the Bank of China and the Industrial and Commercial Bank of China have both been offering yuan-clearing services in Singapore.
RMB deposits in Singapore's banking system exceeded 140 billion yuan (23 billion U.S. dollars) at the end of last July, according to the MAS.
The central bank said in Friday's statement that the introduction of the RQFII scheme in Singapore is "expected to play a key role in developing a vibrant RMB eco-system here."
"The scheme will spur the development of a broader range of RMB products and services to meet investment needs," it added. Enditem