StanChart suspends outbound investment service in China

Standard Chartered (2888) has suspended new investments by its clients in China into offshore products via a quota-based channel amid a surge in demand for overseas investments due to weakness in the local market and currency.

The London-headquartered bank, in a statement to Reuters, cited "commercial reasons" as its explanation for the suspension of new investments under the qualified domestic institutional investor or QDII program.

StanChart's move comes amid Beijing's efforts to stem capital outflows as weaker yuan and a slowing economy have driven savers to move assets offshore.

The QDII program, first launched in 2006, remains the largest outbound investment channel for Chinese investors. The scheme is capped by a quota set by the State Administration of Foreign Exchange.

It helps Chinese wealth and corporate clients invest in offshore funds, bonds and other structured products.

In a client note issued by StanChart last week, the bank said it would not take new subscriptions into offshore-domiciled funds sold via the QDII program with effect from last Thursday.

"Standard Chartered China has suspended the subscription of relevant products for commercial reasons," the bank said in response to Reuters queries.