China has recently released rules for the Renminbi Qualified Foreign Institutional Investors (RQFII) pilot program, allowing offshore yuan funds to invest in domestic securities markets.

Hong Kong subsidiaries of qualified fund management companies and securities firms can use yuan funds raised in Hong Kong to invest in mainland securities within a permitted quota, according to the rules jointly issued by the China Securities Regulatory Commission, the People's Bank of China and the State Administration of Foreign Exchange.

The total investment quota of RQFII is set at around 20 billion yuan ($3.15 billion). To control risks, qualified investors should invest no less than 80 percent of the yuan funds in fixed-income securities, while investment in stocks and equity funds should account for no more than 20 percent.

"The move is expected to widen the investment channel of overseas renminbi funds and speed up internationalization of the Chinese currency," said Li Daxiao, Director of the Beijing-based Yingda Securities Research Institute.

As an effort to expand the global presence of the yuan, China has encouraged use of the yuan in cross-border trade settlement and investment. In October, the country allowed foreign investors to make direct investments in China with the yuan obtained legally overseas.