A revised regulatory framework for the Chinese mainland-Hong Kong mutual fund recognition mechanism went into effect on Thursday (Jan. 2), aimed at better meeting the cross-border wealth management needs of investors on both sides.
Thursday marks the first trading day under the new rules, which experts predict will significantly expand the variety and quantity of mutual fund options available to investors.
Under the new regulations, the sales quota for compliant fund products from the mainland and Hong Kong has increased from 50 percent to 80 percent in each other's markets. Schroders Investment Management Limited has indicated that this policy change will substantially enhance its quota for selling funds across the mainland.
"We will continue to strengthen our investment footprint in China's asset management industry. At the same time, we will bring more of Schroders' global resources and advantages to China," said Shen Qiang, head of Schroders' wealth management business in China.
The new rules expand the types of mutual fund products available for recognition, allowing for "other fund types recognized by China Securities Regulatory Commission (CSRC)" in addition to the existing categories of conventional equity, mixed, bond, and index funds.
The revised regulations also allow mutual recognition of fund investment management functions to be delegated to overseas affiliates within the group.
On December 20, 2024, both the CSRC and Hong Kong's Securities and Futures Commission (SFC) announced new policies for mutual fund sales, which relaxed the types and scales of local funds that can be sold in each other's markets.
The CSRC noted that the mutual fund recognition mechanism between the mainland and Hong Kong has been in place since July 1, 2015. Over the past nine years, the initiative has progressed smoothly, resulting in an increasingly diverse range of mutual fund products available for investors.
New regulations for mainland-Hong Kong fund recognition mechanism takes effect
