BEIJING - China said Tuesday that it would ease restrictions on foreign institutional investors in a step to open its financial market wider.

New rules for the Qualified Foreign Institutional Investor (QFII) and the RMB Qualified Foreign Institutional Investor (RQFII) programs will make it easier for investors to move funds out of the Chinese mainland, according to the People's Bank of China and the State Administration of Foreign Exchange.

Regulators will scrap a rule that limits the amount of funds that QFIIs can take out of the mainland every month at 20 percent of its mainland assets as of the end of the previous year.

The requirements for a three-month capital lock-up period for QFII and RQFII redemptions will be removed, according to the new rules unveiled with immediate effect.

QFIIs and RQFIIs will also be allowed to make forex hedges on their investments in the mainland to offset risk from forex movements.

The QFII program allows licensed overseas investors to invest in the mainland's yuan-denominated capital market, while the RQFII program allows foreign institutional investors to invest in the mainland's onshore market with offshore RMB deposits.

As of the end of May, 287 overseas institutions had received quotas amounting to a total of $99.46 billion under the QFII program, while the quotas in the RQFII program came in at 615.85 billion yuan (about $96.2 billion) for 196 institutional investors from abroad.