HONG KONG: New Frontier in Mainland-Hong Kong Funds Platform

Wednesday January 23 2013

According to the Securities and Futures Commission’s (SFC) Deputy Chief Executive Officer, Mrs Alexa Lam, the plan to introduce Mainland-Hong Kong mutual recognition of funds represents a new frontier for the evolution of renminbi (RMB) investment products and the development of asset management business.

Speaking on 23 January 2013 at a forum of the Hong Kong Securities and Investment Institute, Mrs Lam urged market participants, particularly asset managers, to gear themselves up to capture new opportunities arising from this ground-breaking initiative, which is still being studied and builds upon the experience of the Renminbi Qualified Foreign Institutional Investors (RQFII) scheme.

It is envisaged that qualified SFC-authorized funds domiciled in and operating from Hong Kong would enjoy the status as “recognised Hong Kong funds” and qualified Mainland funds would enjoy the status of “recognized Mainland funds”. These recognised funds could then obtain authorizations and be sold directly in each other’s markets.

It is hoped that the move will add an exciting new depth and richness to the RMB product pool, boost the appeal of the currency outside the Mainland and move closer to the goal of securing Hong Kong’s position as the preeminent offshore RMB centre.

Please see the above link for more details.