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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, according to the Securities and Futures Commission’s (SFC) Deputy Chief Executive Officer, Mrs Alexa Lam.
Speaking today 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 groundbreaking initiative, which is still being studied and builds upon the experience of the Renminbi Qualified Foreign Institutional Investors (RQFII) scheme.
"I encourage you to start thinking which of your products would be suitable for the Mainland market, why they would be suitable, who your target investors would be, and how your products would help them...this is because the Hong Kong-Mainland fund platform that we are building will likely be Asia’s largest and deepest," Mrs Lam said.
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.
"If only we get a fraction of Mainland authorized funds to Hong Kong, we would immediately add an exciting new depth and richness to our 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," said Mrs Lam.
Mrs Lam’s speech is available on SFC’s website (www.sfc.hk).
