11:54 05Nov07 RTRS-CHINA STOCK REGULATOR HAS INSTRUCTED PLANNED QDII FUNDS TO LOWER HONG KONG STOCK  EXPOSURE -SOURCES
12:00 05Nov07 RTRS-China cutting QDII funds' HK stock exposure-sources
    By Victoria Bi and George Chen
   SHANGHAI, Nov 5 (Reuters) - Beijing has told asset managers
preparing to launch overseas stock investment funds to cut their
exposure to Hong Kong because of fears that share prices in the
territory may overheat, sources close to the matter said on
Monday.
   The China Securities Regulatory Commission (CSRC) has
instructed several local fund houses to revise the structure of
their overseas stock investment products and resubmit proposals
with a lower exposure to Hong Kong stocks, they said on Monday.
   Chinese fund houses and banks are jostling to launch
overseas stock funds under the country's Qualified Domestic
Institutional Investor (QDII) scheme, aimed at giving domestic
residents more investment opportunities and promoting a better
balance in China 's international payments.
   "Several QDII applicants have been told to change their
products. This is apparently aimed at avoiding a shock to the
Hong Kong stock market," a fund industry source familiar with
the matter told Reuters on Monday.