On December 20, 2024, the Securities and Futures Commission ("SFC") welcomed the publication of revised provisions by the China Securities Regulatory Commission ("CSRC") and operating guidelines by the People’s Bank of China and the State Administration of Foreign Exchange. These revisions aim to implement enhancements to the Mutual Recognition of Funds ("MRF") scheme.
One of the five measures announced by the CSRC on April 19, 2024, for capital market cooperation with Hong Kong, the MRF enhancements include: (i) relaxing the cap on the value of units sold to investors in the host market from 50% to 80% of the fund’s total assets; and (ii) allowing the delegation of investment management functions to overseas asset management companies within the same group.
For Hong Kong funds approved by the CSRC for public offering in Mainland (Hong Kong MRF Funds), the relaxation of sales limits will increase their maximum potential sales value on the Mainland by three times. Additionally, the relaxation of overseas delegation restriction will provide more opportunities for international asset managers to leverage their expertise and offer offshore solutions to Mainland investors.
These enhancements, effective from January 1, 2025, are expected to expand business potential for asset managers and significantly increase the diversity and scale of products under the MRF scheme.
This article was generated using SAMS, a proprietary artificial intelligence technology under development by Timothy Loh LLP and its affiliates. This article does not constitute legal advice and should not be relied upon by any person. Only the original text, which is hyperlinked to this article, should be regarded as definitive.
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