The Securities and Futures Commission (SFC) and the Autorité des Marchés Financiers (AMF) have signed a Memorandum of Understanding (MoU) on France-Hong Kong Mutual Recognition of Funds (MRF).
As a result eligible Hong Kong public funds and French UCITS funds will be able to be distributed to retail investors in each other’s market through a streamlined authorisation process, the organisations said in a joint statement announcing the deal.
The MoU is the first agreement between Hong Kong and a member of the European Union which establishes the regulatory framework for distribution of eligible Hong Kong and French funds, which currently include general equity funds, bond funds and mixed funds.
It also stipulates a mechanism for regular dialogue and regulatory cooperation thus enabling the SFC and the AMF to fulfil their respective supervisory and regulatory mandates, the statement said.
“Promoting the development of Hong Kong’s asset management industry is one of our strategic objectives,” said Ashley Alder, the SFC’s chief xecutive Officer. “This new cooperation framework is an important milestone for Hong Kong’s continuous development as an international asset management centre as it opens up the opportunity for Hong Kong funds to be sold in one of the leading markets in the European Union.”
Gérard Rameix, the AMF’s chairman called the newly established bridge between France and Hong Kong “an important breakthrough” for the French asset management industry as it seeks to develop activities internationally.
With many financial services businesses still undecided about whether to remain in London – Europe’s current main financial centre – during the uncertain Brexit negotiations, France has been on the charm offensive for the last 12 months as it bids to lure companies away from the UK.
“[The MoU] it reflects the attractiveness of Paris as a financial centre and demonstrates that there is a demand from one of the leading markets in Asia for French asset management companies and products.
“We look forward to the opportunities this agreement will bring to our market, as well as to the enhanced cooperation between the AMF and the SFC to ensure that our industry players operate in a clear and robust supervisory framework and that our investors receive proper protection,” he said.
Further details of the MRF arrangement are set out in the “SFC circular” and the “AMF requirements and process for mutual recognition of Hong Kong Funds”.