Euroclear Bank, the Brussels-based international central securities depositary (ICSD), has opened an account with Hong Kong’s Central Securities Depositary, the Central Moneymarkets Unit (CMU).
This opening coincides with the recent announcement by Hong Kong’s Securities and Futures Commission and the China Securities Regulatory Commission on the implementation principles of the Mainland-Hong Kong Mutual Recognition of Funds (MRF) initiative. The membership enables Euroclear to participate in MRF through CMU.
The MRF will allow eligible Hong Kong-domiciled funds to be sold to retail investors in China, and qualifying Chinese funds will also be available to the retail investor base in Hong Kong. In addition to the existing availability of Hong Kong-domiciled funds, Euroclear Bank clients will be able to access China-domiciled funds through Euroclear’s automated fund processing platform - FundSettle.
Ivan Nicora, CEO Hong Kong Branch, Regional Head, Asia-Pacific, Euroclear commented: “The ability to gain access to China domiciled funds under the MRF arrangement is a major development. This initiative reinforces our Asia growth strategy as we continue to support the development of the MRF as we endeavour to facilitate an international link to this market. We expect demand to grow significantly in the next three to five years.”
