Mutual recognition starting in July for funds registered in Hong Kong and mainland China will lay the groundwork for the city to become a “fund powerhouse”, the secretary for financial services and the treasury said.
Ceajer Chan Ka-keung said that given the operational complexity involved in mutual recognition of funds, it will not be easy to replicate elsewhere, unlike the renminbi-denominated qualified foreign institutional investor scheme, the Hong Kong Economic Journal reported Thursday.
Authorities across the border have prepared for four years for the launch of the new initiative, which market observers believe could give a big boost to the city in its rivalry with Singapore to be an Asian hub for funds.
To be eligible for mutual recognition, funds must have been operating for at least a year and have at least 200 million yuan (US$32.3 million) of assets under management.
An initial quota of 300 billion yuan worth of funds from each side has been set.
The next step would be to nurture more high-caliber financial talent in the city to gear up for growth in the fund industry, Chan said.
The city’s longtime rival Singapore has signed similar agreements under the Asia Region Funds Passport scheme and the ASEAN Collective Investment Scheme Framework with countries including Australia, New Zealand, South Korea and members of the Association of Southeast Asian Nations including the Philippines and Thailand.
Translation by Vey Wong
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