Central Bank and Hong Kong SFC enhance cooperation in public fund distribution

The Securities and Futures Commission (SFC) and the Central Bank of Ireland (CBI) today entered into a Memorandum of Understanding on Mutual Recognition of Funds (MoU) to allow the distribution of eligible Hong Kong and Irish public funds in each other’s market through a more streamlined process in light of the continued global financial market growth and increasing cross-border activities in asset management. This agreement serves as an updated cooperation framework following the two regulators’ MoU in 1997 on the supervision of cross-border investment management activities.

The updated framework provides for the cross-border offering of eligible Hong Kong public collective investment schemes in Ireland for the first time and of Irish Undertakings for Collective Investment in Transferable Securities (UCITS) that meet specific criteria to be authorised by the SFC for sale in Hong Kong under an expedited approval process (Note 1). 

Central Bank of Ireland Deputy Governor, Consumer and Investor Protection, Derville Rowland said: “The updated memorandum of understanding and mutual recognition of funds scheme is an important step, providing investors with greater investment opportunities through increased choice and better diversification in their investments. It also demonstrates our commitment to strong regulatory cooperation between our two authorities. We look forward to working closely with the SFC.”

“We welcome Ireland as the 11th jurisdiction to join our mutual recognition of funds scheme, which reflects global recognition of Hong Kong’s regulatory standard of investment funds,” said Ms Julia Leung, the SFC’s Chief Executive Officer. “We remain committed to expanding the scheme as part of our core strategy to deepen Hong Kong’s financial connectivity with overseas markets.” (Note 2)

Further details of the mutual recognition of funds scheme are set out in the SFC’s circular and the CBI’s circular issued today.

Notes:

1. Eligible simple funds domiciled and regulated in Ireland may be processed under the SFC’s FASTrack (Fund Authorisation Simple Track) approach to further expedite the authorisation process after the signing of the new MoU. Under FASTrack, the SFC undertakes to complete authorisation within 15 business days.  
2. The 10 jurisdictions which have mutual recognition of funds arrangements with the SFC are Australia, France, Luxembourg, Malaysia (in respect of Islamic funds), the Mainland, the Netherlands, Switzerland, Taiwan (in respect of exchange-traded funds), Thailand and the United Kingdom.