Qualified Domestic Institutional Investor (QDII)

Written By
Paul Tracy
Updated November 4, 2020

What is a Qualified Domestic Institutional Investor (QDII)?

A qualified domestic institutional investor (QDII) is an institution allowed to invest in foreign securities. 

How Does a Qualified Domestic Institutional Investor (QDII) Work?

China runs one of the most well known QDII programs. There, the China Securities Regulatory Commission allows qualified banks, mutual funds and other investment companies to invest in foreign securities. In general, to qualify the QDII must have stable finances, sound governance and internal controls, experienced management, and no recent securities violations. Net asset requirements also exist.

QDIIs are generally allowed to invest in equities, debt securities, bonds, bank deposits and derivatives, but they are not allowed to invest in property or precious metals, or to underwrite securities. In many cases, the QDII appoints an overseas investment consultant that assists the QDII with investing in a foreign market.

Why Does a Qualified Domestic Institutional Investor (QDII) Matter?

QDIIs exist mainly in countries that have pegged currencies and/or where capital is not able to flow freely in and out of the country (though the countries may have other reasons for controlling ownership positions, such as inflation concerns). QDIIs provide limited opportunities for local investors to access foreign markets.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Qualified Domestic Institutional Investor (QDII).
Be the first to ask a question

If you have a question about Qualified Domestic Institutional Investor (QDII), then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Qualified Domestic Institutional Investor (QDII), then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Qualified Domestic Institutional Investor (QDII)

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms