23 March 2019

China to promote mutual recognition of HK and mainland funds

China will promote the mutual recognition of Hong Kong and mainland funds in a move to facilitate cross-border sales of investment funds, the China Securities Journal reported Thursday, citing Xiao Gang {肖鋼}, chairman of the China Securities Regulatory Commission.

At present, in view of China’s capital controls, Hong Kong-established funds cannot directly sell on the mainland, while the same restriction applies to mainland funds in Hong Kong.

With the mutual recognition arrangement, mainland funds will gain direct access to the global markets through Hong Kong, while Hong Kong fund products could attract more mainland investors, the report said.

Xiao also welcomed Beijing’s decision to open trading between the Shanghai and Hong Kong stock exchanges, saying it will help bring in fresh long-term capital to the mainland stock market, encourage the use of the renminbi and further cement Hong Kong’s status as an international financial center.

China is also considering further expanding the investment quota for qualified foreign institutional investors (QFIIs), while a plan to reform the registration system for initial public offerings is expected to be unveiled at the end of this year, Xiao was quoted as saying.

– Contact HKEJ at [email protected]



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