On November 4, 2024, the SFC’s new Fund Authorisation Simple Track (“FASTrack”) launched for a six month trial period. FASTrack is designed to speed up the SFC fund authorisation process for simple funds from specified jurisdictions. FASTrack aims to enhance the efficiency and competitiveness of Hong Kong’s asset management industry and is part of the SFC's ongoing efforts to improve the fund authorisation process, particularly for funds from Mutual Recognition of Funds (“MRF”) Jurisdictions, which have comparable investor protections to Hong Kong.
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Key Details
- Current Process: The SFC previously processed fund authorisation applications via two streams: one for standard applications and one for non-standard applications. On average, the processing time is less than one and a half months for standard applications and two and a half months for non-standard ones. These times meet the SFC's target processing times.
- FASTrack Launch: Since November 4, 2024, the FASTrack process has allowed for the faster authorisation of certain funds from MRF jurisdictions, with the SFC aiming to process such applications within 15 business days.
Eligibility Criteria for FASTrack
- Fund Types: Funds eligible for FASTrack include equity, bond, and mixed funds, ETFs and unlisted funds that track either a plain vanilla index or an index adopted by other authorised fundsand index-tracking funds, including both, as well as feeder funds (if the master fund is eligible).
- Management & Investment Delegates: The fund's management company must be based in an MRF jurisdiction or a jurisdiction with an acceptable inspection regime. Investment delegates, if any, must also be located in these jurisdictions or affiliated with the management company.
- Fund Features: The fund should not have complex structures or derivatives beyond a certain threshold as FASTrack is intended for “simple” funds that do not introduce novel features or pose significant regulatory concerns.
Processing Timeline
- Application Review: The SFC will take up FASTrack applications within 5 business days of receipt and if successful, grant authorisation within 10 business days of take up.
- Post-Vetting: The SFC will conduct post-approval checks to ensure compliance with authorisation conditions.
Pilot and Implementation
- Pilot Period:The FASTrack process will run as a pilot for a six month period from November 4, 2024 to May 4, 2025. Applications that meet the criteria will be processed under FASTrack, while others will follow the existing standard or non-standard processes.
- Monitoring and Enhancements:The SFC will monitor the pilot phase and may refine the process before full implementation.
Obligations for Applicants
- Applicants must ensure their funds comply with the Code on Unit Trusts and Mutual Funds and other relevant SFC guidelines.
- Non-compliance will result in appropriate regulatory action to maintain investor protection standards.
For further details, applicants are encouraged by the SFC to consult the updated Information Checklist and FAQs on the SFC website.
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