Hong Kong’s Investment Fund Association (HKIFA) today called on China to relax its restrictions relating to the sale of cross-border funds.
The HKIFA, which represents the Hong Kong-based international fund houses with a total of US$1.2tn in assets under management requested that the China Securities Regulatory Commission lift some restrictions.
The industry body is negotiating for an exchange by which Hong Kong funds could be traded only in the region covered by the so-called “Greater Bay Area” and not across the rest of China, as is currently the case.
The body is also seeking to reduce the approval process for the Mutual Recognition of Funds Scheme (MRFS), operative since 2015, to six months. The current time frame necessary to secure approval is three years.
EY worked with the HKIFA to develop the proposals. Christine Lin, a partner at EY for financial services, told the South China Morning Post: “The Hong Kong retail fund market is limited by its small population. The Greater Bay Area has a population of 70 million, which is 10 times that of Hong Kong’s … it offers a huge expansion opportunity for the Hong Kong fund industry.”