CHINA will lift a two-year suspension on foreign funds raising money in the country to invest overseas as early as June, sources familiar with the matter said, a sign that the government is getting less anxious about capital outflow pressures.

Some industry executives said the expected resumption of the Qualified Domestic Limited Partnership (QDLP) program may mean that an official crackdown on capital outflows and a weakening of the U.S. dollar have provided the authorities with more policy flexibility.

The Shanghai Municipal Government Financial Services Office, which runs the QDLP program, did not respond to requests for comment, while the State Administration of Foreign Exchange (SAFE), which controls the capital account, did not immediately respond to a request for comment.

The QDLP program allows foreign fund managers to raise money within a set quota from high net-worth Chinese investors through a wholly-owned onshore fund management company and invest the cash overseas.

Launched in 2013, QDLP was one of a handful of controlled programs that allowed Chinese to invest money overseas. It was subsequently informally suspended in 2015 after the stock market crashed and lost around 40 percent of its value.

The licenses and accompanying quota had previously been issued in batches, with authorities expected to issue the long-awaited next round in coming weeks, said the sources.

One of these people said authorities will, however, be a “little cautious” granting only around half a dozen licenses. The quota will also be lowered from US$100 million per manager during the previous batches to between US$50 million and US$75 million this time round, one of these people and a third individual briefed on the matter said. That could amount to between US$300 million to US$450 million in fund flows abroad.

The sources said the SAFE must ultimately sign off on lifting the suspension.

But the SAFE may be more comfortable doing so after the yuan rose 1 percent against the dollar this year after falling 6.5 percent in 2016. China’s foreign exchange reserves also rose in April for a third straight month, as stringent capital controls and a pause in the dollar’s rally helped staunch outflows.

On Friday, the SAFE said China’s cross-border capital flows were stabilizing and improving.

Some foreign managers, such as insurance giant Allianz and Dutch manager Robeco, have positioned for the relaxation in curbs since late last year..

The opening-up of the QDLP quota, though small, will also expand the range of investment options global private banks can offer their wealthy clients in China, industry officials said.

BlackRock Inc. became the first traditional asset manager to receive the QDLP license, joining a handful of other global funds.

QDLP funds are private, meaning data are not publicly available on assets or performance, but industry insiders say they have seen strong demand as wealthy Chinese scrambled to hedge their exposure to the falling yuan by investing offshore.

A growing number of foreign financial institutions, including Aberdeen Asset Management, U.S. hedge fund Bridgewater Associates and Vanguard, have recently set up stand-alone money management firms in China as regulators further deregulate the mainland fund industry.

Previously, foreign asset managers looking to distribute investment products in China had to operate through minority-owned joint ventures with domestic firms, but the government has been gradually loosening the reins. (SD-Agencies)