It is the first time that the U.K. has signed a cross-border fund sales agreement with Hong Kong. The approval process could be as quick as two months.
Hong Kong signed an agreement with the British Financial Conduct Authority, or FCA, last week that allows some 2,500 retail funds to be sold in the two markets. «This is the first time the U.K. has signed such a cross-border fund sales agreement,» said Megan Butler, executive director of the FCA in an interview with the «South China Morning Post».
Butler said the approval process could be as quick as two months. To qualify for cross border sales, funds must be approved by Hong Kong’s Securities and Finance Commission, or SFC, and the FCA.
Boosting Fund Hub Status
Hong-Kong based funds which wish to distribute in the U.K. can just apply to the FCA via a simple procedure, while funds in U.K. can distribute in Hong Kong with approval by the SFC.
Although Hong Kong has similar agreements with the mainland, Switzerland and France, no French or Swiss funds are yet sold under these cross border agreements, noted Sally Wong, chief executive of Hong Kong Investment Funds Association.
Initial Interests
However, there are some initial interests, she said. «We have provided some input to the French fund association which is preparing a fact sheet for its members,» Wong said in the «South China Morning Post».
In July this year, the Hong Kong government implemented the open-ended fund companies regime, or OFC, in a move that boosts its status as a full-service asset management centre in Asia. The regime offers fund managers the option of setting up a mutual fund in the form of a Hong Kong company, in addition to forming a unit trust.
