A statement from China’s State Administration of Foreign Exchange (SAFE) on Friday showed that the initial group of investors are Hong Kong arms or joint ventures of Chinese securities firms and fund management companies.  SAFE said it would process applications from other qualified investors as it received them — China had earmarked 20 billion yuan for the initial RQFII quota. 
Sources said that China’s securities watchdog had picked 19 brokerages and fund management firms as RQFIIs, and the 19 would share the 20 billion yuan quota.
According to SAFE, investors including CSOP Asset Management, China Southern Fund’s Hong Kong joint venture as well as the Hong Kong units of China Asset Management, Harvest Fund Management, Dacheng Fund Management, China Universal Asset Management, HFT Investment Management, Bosera Asset Management and Hua An Fund Management, each got a 1.1 billion yuan quota. 
The RQFII scheme, also called mini-QFII, is widely regarded as a gift offered by Beijing to Hong Kong to help support the fledgling market for trading offshore yuan that has been established in the former British colony.
China has been promoting the use of the yuan in cross-border trade, building Hong Kong into an offshore yuan center. But foreign holders of yuan can only park the money at banks or buy a limited number of yuan-denominated bonds in Hong Kong as there is a shortage of investment channels for the currency overseas.  
Under the scheme, designated foreign investors will be allowed to buy mainland stocks and bonds with yuan they raised offshore, thus potentially offering a new incentive for people to hold and use yuan.
Fund houses and securities firms may invest up to 20 percent of the money raised under the program in Chinese stocks and must have at least 80 percent in China’s fixed income markets.