QFII (Qualified Foreign Institutional Investor) system, namely foreign capital major invests orgnaization system, it is to point to the investor of orgnaization of eligible foreign country that allows approved, the foreign currency fund that spends into certain specified amount is collected below fair provision and limitation, change for local money, invest local security market through the special account that superintends strictly, its capital benefit is gotten, a kind of dividend market that is foreign currency remit via can turning after approval opens mode. QFII is system of a kind of quota actually, the purpose controls exchange rate to go to the lavatory, lest because be in,many capital flow falls, currency of this home products is become because of changing when buying and selling and cause exchange rate to fluctuate. At present India, Taiwan implemented concerned system and accumulated rich experience. One, the QFII system of Taiwan: Taiwan published this system on December 28, 1990, allow foreign capital major to invest an orgnaization to invest Taiwan stock market directly since 1991, stipulate the foreign capital major that accords with specific qualification condition invests an orgnaization, OK and immediate application invests a stage. The investor of foreign capital orgnaization that enters Taiwan security market permissibly at first must satisfy one of the following condition: (1) if foreign capital bank, before its total assets wants to be ranked in western big bank 500 in, and total of capital of hold negotiable securities is in above of 300 million dollar; (2) if foreign capital insurance company, the requirement is engaged in insurance Wu 10 years, and total of capital of hold negotiable securities is in above of 500 million dollar; (3) if fund administration, requirement company holds water full 5 years, and total of assets of fund of investment of management negotiable securities is in above of 500 million dollar. In March 1991, orgnaization of investment of major of the first foreign capital invests Taiwan approve directly stage. Since 1993, taiwan superintendency authorities relaxes ceaselessly the qualificatory requirement that makes QFII: (1) the category that raises QFII. QFII main body extended business of the negotiable securities inside business of foreign capital negotiable securities and Taiwan island to own the business of overseas negotiable securities that dominates equity from company of foreign capital bank, insurance company, fund management 1993, extended 1995 invest orgnaization and fund of provide for the aged for foreign government, included joint fund, unit 1996 fiducial or investment is fiducial; (2) ) relax requirement of management fixed number of year. Never reached the management fixed number of year of the foreign capital insurance company that can hold the position of QFII less at relaxing 10 years 1993 not less than 5 years; (3) relax actual strength requirement. Qualified 1993 the foreign capital bank that becomes QFII falls from before total assets is the world 500 before be the world 1000; (4) relax negotiable securities invests a requirement. To can applying for to become the foreign capital fund of QFII its ran the administration 1993 specified number of assets of fund of negotiable securities investment relaxes from above of 500 million dollar above of 300 million dollar, relaxed further 1995 above of 200 million dollar. The requirement that invests negotiable securities amount to becoming the foreign capital insurance company of QFII relaxes from not less than initial 500 million dollar not less than 300 million dollar 1995. The qualificatory condition of active QFII includes: (1) if foreign capital bank, before its total assets wants to be ranked in western big bank 1000 in, and have international finance, negotiable securities or fiducial business experience; (2) if foreign capital insurance company, the requirement is engaged in insurance Wu 3 years, and total of capital of hold negotiable securities is in above of 300 million dollar; (3) if fund administration, requirement company holds water full 3 years, and total of assets of fund of investment of management negotiable securities is in above of 200 million dollar; (4) to stockjobber character, net assets exceeds 100 million dollar and have international negotiable securities to invest experience; (5) other orgnaization investor includes: The investment orgnaization that foreign government has, management history fund of not less than provide for the aged, management history fiducial, investment believes not less than mutually beneficial fund of 3 years, unit hold in the palm and the capital fund that its manage not less than 200 million dollar. Of Taiwan QFII system evolve into circumstance detailed to see a table one: Data sources: (1) LEE-RONG WANG, CHUNG-HUA SHEN, "DO FOREIGN INVESTMENTS AFFECT FOREIGN EXCHANGE AND STOCK MARKETS - THE CASE OF TAIWAN" , APPLIED ECONOMICS, 1999, 31, 1303-1314; (2) Taiwan stock exchange. The field is used in capital, ask QFII will collect capital to basically be cast entirely at the beginning at negotiable securities, the 10% stocks 3 lunar period new station money that QFII allows to will collect amount by 1991 time deposit account, at the beginning of 1992 more allow this amount of 10% but invest in is apart from maturity the monetary market tool inside 3 months, 3 lunar period that allowed QFII to use again 1994 after time deposit account expires can add puts 3 months, 1995 the limitation that can invest monetary market tool from 10% raise 30%.1998 year Taiwan allows QFII to invest option market, allowed to invest Taiwan mainland to the company is issued and trade in mainland 2000 can change the financial bond with bond and financial condition inferior level. The investment limits of current QFII includes: (1) appear on the market the stock that trades with bar; (2) appear on the market trade to be benefited with what bar trades proof; (3) governmental bond, finance bond, common debenture and can change debenture; (4) the new station that orgnaization of finance of the fund of tool of market of time deposit, currency, open mode, subscribe with cash settle accounts or card of authority identifying buy, international releases money bond. The investment of QFII enjoys certain taxation privilege, need to hand in except bonus part of 20% outside raising tax beforehand, QFII is avoided pay capital value added tax. Taiwan security market liberalizes the process will be advanced quickly, the likelihood cancels to appear on the market to foreign capital control inside the near future the upper limit of company equity is installed (bank, telecommunications and news are published kind appear on the market company except) . Long-term and character, as join WTO, taiwan will cancel QFII system finally. 2, FII system of India: Indian FII (FOREIGN INSTITUTIONAL INVESTORS) the system is similar the QFII system of Taiwan. Indian government released foreign orgnaization investor 1992 how-to (GUIDELINES FOR FOREIGN INSTITUTIONAL INVESTOR) the gate that open foreign capital shares Indian security market. Indian card inspect met the basis in November 1995 (SECURITIES AND EXCHANGE BOARD OF INDIA, abbreviation is SEBI) the SEBI that announce (foreign orgnaization investor) how-to regulation, foreign investor must have outstanding achievement of professional competence, financial actual strength, good reputation, history to suffer register ground finance to superintend authorities strict, via Indian card inspect meeting and India lay in a bank (RESERVE BANK OF INDIA, abbreviation is RBI) FII competence can be gained after approval. The investment limits of FII includes India one class and 2 class market appear on the market negotiable securities (include stock, bond, identify equity evidence) , the mutually beneficial fund of home of unlisted bond, India and unit are fiducial. FII invests upper limit of equity of onefold India company for 10% , the equity upper limit that all FII invest onefold India company is 24% , but special situation can be amounted to 40% . Investment income is OK after deducting income tax of 10% capital value added tax and the dividend of 20% and accrual remit, need not examine and approve further. Although open rate not as good as Taiwan, india also adjusts policy to encourage orgnaization investment ceaselessly. In fund of original annuities, mutually beneficial, investment company of fiducial, insurance company, reinsurance, bank, asset manages company, investment advisory firm, orgnaization invests assorted management company, depositary, be governed on somebody's behalf by accredit person, be commissioned on the foundation of the company, after the limits of FII expands recently, cover donate foundation and fund, college fund, charitable foundation to wait. Indian card inspect can allow business of foreign negotiable securities to be run in India on behalf of registered FII, foreign capital can create bank of company of joint-stock stock manager, asset management company, merchant with Indian associate collaboration. FII can open foreign currency account and account of blame dweller rupee, the capital between two kinds of account flows with settle accounts of market exchange rate. In recent years, the dimensions of Indian capital market and deepness all because of introducing foreign orgnaization investor develop somewhat. 3, the influence of foreign orgnaization investor to local market: Concerned QFII is right the stock market and the debate long-standing of the influence that collect city. The proponent thinks, mix as a result of stable effect demonstrative effect, foreign investment affects the front to native stock market. Investor of developing country stock market in order to come loose door give priority to, chase after easily go up kill drop, go against market stability. Foreign orgnaization investor pays attention to fundamental analysis, benefit at the stock market deepen, stability and maturity. Anti thinks, be not stabilized and foreign investor itself does not decide. Of foreign capital shed initiate to ask high share price, but its are poured out of will drag small stock price. If was not superintended strictly, many and abrupt foreign capital discrepancy can increase the wave motion of the stock market. On the other hand, foreign investment will accompany frequent money to change, go against the stability of monetary exchange rate. The addition of exchange rate risk can affect foreign trade, increase pair of strong cost. The circumstance of Taiwan and India all makes clear, of foreign orgnaization investor enter the capital supply that increases local market, following plan institute show particular case. Data sources: Taiwan stock exchange, indian stock exchange. End the FII end 2000 amounts to 12 billion dollar in the accumulative total net investment of Indian security market. A case of a physically strong patient running a high fever or suffering from such disorders as stasis of blood considers to make clear, the wave motion that the pass in and out of foreign capital can increase this money exchange rate but fluctuant to the stock market influence is slight, additional, before foreign capital is flowed into, the wave motion of share price is main by be not main factor change to cause, after foreign capital is flowed into, the wave motion of share price by main factor and blame main factor change is brought send (LEE-RONG WANG, CHUNG-HUA SHEN, 1999) . The QFII of Taiwan is overall buy super- , after having a deficit first, be filled with. Foreign legal person collects 447 million dollar permissibly since April 1991, among them over Taiwan show at 4900 o'clock the left and right sides builds a warehouse, result index drops, deficit again and again. Foreign capital collected capital to add 1992 for 846 million dollar, but point to glide further to 3000 bits, QFII is overall and average obtain interest rate to be - 11.62%.1993 the beginning of the year, taiwan stock market wanders at 3000-4000 dot, the for fear that that foreign capital continues to induct local investor to avoid not as good as accomplishment actors or actress, turn over Taiwan stock market to exceed the style of short line pass in and out, long-term investment is politic in adopting, and do dish of person progressively also mainland is changed, in those days boom of Taiwan of the 4th quarter picks up, point to rise, gain profit on average 35.94% , the orgnaization becomes the foreign legal person that takes main area research seriously as a result to was mixed 1993 1994 of bull market win the home. QFII is entered not only the investment concept that affected Taiwan, and the proportion that increased investor of Taiwan market orgnaization. Express 2: Taiwan casts 別 of 資 person 類 to trade 　 of 1996 89.3 8.6 0.0 2.1 1997 90.7 7.6 0.0 1.7 1998 89.7 8.6 0.0 1.6 1999 88.2 9.4 0.0 2.4 2000 86.1 10.3 0.0 3.6 2001 85.5 10.1 0.0 4.4 of 　 of 　 of legal person of foreign country of natural person of foreign country of legal person of Taiwan of natural person of Taiwan of proportion a particular year data sources: 　 of Taiwan stock exchange 4, the QFII system impact to China and countermeasure 　 above all, change supply and demand of market structure, capital. As a result of foreign orgnaization investor enter, our country security market with coming loose the market structure that give priority to will improve an investor somewhat, orgnaization investor is occupied than will rising stage by stage. The supply of market fund channel will tend further diversity, the linkage sex of stock market and foreign currency market can increase further, investor will pay close attention the progress circumstance that finance superintends authorities to examine and approve QFII reachs his the influence to the market, the wave motion of RMB exchange rate will be increased, the internationalization rate of foreign currency market and security market can rise stage by stage, those make progress in internationalization process win in the competition that the orgnaization will be in faster domestic banking to did not come first machine. Next, the influence invests strategy and investment concept. At present the main goal of investor of our country security market is to pass short line operation to get 2 step market price to differ, overmuch to the fluctuate attention of stock price, to appearing on the market the management of company itself and benefit care insufficient. Tell objectively, concept of this kind of investment is the child of our country's peculiar economy system and security market system. Enter our country as more and more foreign certificate business and foreign investor, the contact of domestic certificate business and investor and abroad is increasingly frequent, the popular investment concept on international will be accepted by the investor of our country gradually. Investor can take seriously more appear on the market the investment value of company and its stock, long-term investment, combination manages in and wind manages consciousness nearly also will thorough popular feeling. Finally, financial innovation pace will be accelerated further. As a result of the rich experience on foreign market, QFII studies to financial develop produce it is certain to will have with development urge action. The certificate outside churchyard still, the fund management company, insurance company competition in financial innovation respect will be further aggravate, can taller and taller to the requirement of risk management, the contention of the advanced banking talent that just runs to familiar domestic and international market each will upgrade quickly. Our countermeasure: Macroscopical countermeasure: Elaborate scheme, reform of form a complete set, progressively and open. Our country builds QFII system, need to be coordinated with the affirmatory clause photograph that joins WTO, act on principle of financial mutual beneficial to choose credit the foreign orgnaization investor with distinguished, abundant actual strength enters Chinese market, the essential industry that protects relation the national economy and the people's livelihood appropriately is like financial industry, telegraphic course of study to wait, fixed self-criticism opens the effect, pay close attention to collect the negative effect that the market may bring external, adjust relevant policy according to particular case, attention and exchange control and finance superintend a system to coordinate, accelerate the respect reform such as exposure of taxation system, accounting system, information. Microcosmic policy: Company give somebody a new lease on life, foster strengths and circumvent weaknesses, contend for achieve an advantage. After QFII system is carried out, the talent will make the central point that just competes each again. The meeting such as company of bank of foreign certificate business, foreign capital, insurance company, joint-stock stockjobber, fund management grooms goodly with favorable treatment mechanism and person use up his the development environment of ability draws domestic talented person, domestic banking must ground of leave no stone unturned creates a condition, draw a talented person, tarry talent, strive for occupational talent commanding elevation, establish efficient incentive mechanism, optimize constituent structure ceaselessly, introduce advanced research technique, promote financial innovation actively, promote a technology the standard in the round, quicken internationalization pace. On one hand, the negotiable securities of QFII trades will make the brand-new competitive field on 2 class market, on the other hand, domestic orgnaization passes abroad branch possibly also or establish the means such as off shore fund to attract foreign capital. Can foreknow, win in the competition that the orgnaization will be in those finance that have company give somebody a new lease on life successfully to did not come first machine. (www.my-paper.info my paper)