BEIJING – Subsidiaries from nine Chinese fund companies and 12 securities firms in Hong Kong were approved by the China Securities Regulatory Commission to use yuan deposits to invest in the mainland's capital markets, the regulator said on Friday.

The companies and firms have applied to the Hong Kong securities regulator for the license to sell yuan-denominated products that invest in the mainland's bond markets, according to the CSRC.

The initial quota for the pilot program, known as the RMB Qualified Institutional Investors (RQFII), is 20 billion yuan ($3.1 billion). According to the regulator, 80 percent of the quota will be allowed to invest in the mainland's fixed-income markets such as government and corporate bonds while only 20 percent will be allowed to enter the stock markets.

The regulator said it is studying the feasibility of allowing more overseas institutional investors to participate in the pilot program. CSRC is also looking into expanding investment ratio and products in the future.

In the meantime, the regulator said that it is accelerating the reform of the administrative approval system and will remove 12 administrative approval items. Since 2002, the regulator has removed 111 such items, according to the CSRC.