Similar to QFII (Qualified Foreign Institutional Investor), it is a transitional arrangement which provides limited opportunities for domestic investors to access foreign markets at a stage where a country/territory's currency is not traded or floated completely freely and where capital is not able to move completely freely in and out of the country.
Also, the stocks invested or the fund linked must be listed on or approved by the area that have signed memorandums of understanding with the CSRC.
In November 2007, Premier Wen Jiabao stated the need to further study the scheme for individual Mainland Chinese residents to invest in stocks in Hong Kong.
[1] In April, 2012, it was announced that "Beijing’s latest financial reform will allow local residents in the wealthy city of Wenzhou to make investments abroad".
[2] "Premier Wen Jiabao says the central government is determined to break the mainland's banking monopoly, and if [the Wenzhou] pilot schemes in the special financial zone newly set up ... prove successful they can be promoted and implemented nationwide", the South China Morning Post reported.