Hong Kong managers undeterred by possible delay in mutual recognition

18 June 2014   Category: News, Asia, China, Global, Hong Kong   By Hui Ching-hoo

Hong Kong’s foreign asset managers have claimed they are not put off by a possible delay in the implementation of the mutual recognition scheme with Mainland China, while stressing that they remain eager to domicile new products in the territory.

When Hong Kong’s Securities & Futures Commission’s (SFC) Deputy Chief Executive Officer Alexa Lam remarked in December 2013 that regulators on both sides had reached common ground on some key principles for the development of the platform, there was expectation that the pilot scheme was imminent.

However, Asia Asset Management understands that the programme had been intended to launch in March 2014, but that the timeframe has now been pushed back to sometime beyond June.

Hong Kong’s foreign asset managers claim, however, that they are not overly concerned by any delay, which for some could jeopardise their capability to distribute products north of the border.

Douglas Eu, chief executive officer, Asia-Pacific, Allianz Global Investors (Allianz GI), told AAM that he was not aware of the current timeline for the scheme, but suspected that a number of technical details still needed to be ironed out, such as rules for distributing Hong Kong-domiciled funds in the Mainland.

However, Mr. Eu emphasised that Allianz GI would be prepared for when the scheme does launch. “Many of our funds… do tick all the boxes for the initiative. We’ll be well prepared when the programme is implemented.”

Carol Wong, managing director, Asia-Pacific, Old Mutual Global Investors, added that the delay would not put a dent in its regional business, as its operations were currently slanted towards Hong Kong and Singapore, rather than China. “However, some new Hong Kong-domiciled [funds] with little local client base might be hard hit by the hiccup,” Ms. Wong added.

Baring Asset Management also appeared to have not been deterred by the speculated delay, with the firm planning to launch a range of Hong Kong-domiciled funds from early 2015.

Gerry Ng, chief executive officer, Barings, Asia ex Japan, said his firm would draw on its long record of investing in the region when it came to these new products. “Initially, we plan to launch a focussed range of locally domiciled funds in Hong Kong, drawing on our deep pool of asset management expertise.”

Paul Smith, managing director, Asia-Pacific, CFA Institute, has previously said that the mutual recognition scheme would act as a gauge for Mainland authorities in terms of how competitive its asset class management industry is internationally. He also said that the scheme was an example of a ‘push-back’ by Asian financial authorities in response to increasing regulations from the West, following the 2008 Lehman Brothers crisis.

According to figures from the SFC, around 36 new unit trusts and mutual funds managed by foreign asset managers have been authorised for the first six months in 2014.

Offshore unit trust and mutual funds authorised by the SFC in 2014

Product

Sub-fund

Issuer

Authorization date

Mirae Asset Global Discovery Fund

Mirae Asset Asia Pacific Dividend Equity Fund

RBS (Luxembourg) S.A.

10/6/2014

Mirae Asset Global Discovery Fund

Mirae Asset GEM Great Consumer Equity Fund

RBS (Luxembourg) S.A.

10/6/2014

Mirae Asset Global Discovery Fund

Mirae Asset GEM Sector Leader Equity Fund

RBS (Luxembourg) S.A.

10/6/2014

Mirae Asset Global Discovery Fund

Mirae Asset Global Great Consumer Equity Fund

RBS (Luxembourg) S.A.

10/6/2014

HSBC Global Investment Funds SICAV

HSBC Global Investment Funds - Global Equity Volatility Focused

HSBC Investment Funds (Luxembourg) S.A.

9/6/2014

RHB-OSK Islamic Regional Balanced Fund

 

RHB Asset Management Sdn Bhd

6/6/2014

Pictet

Pictet - Asian Local Currency Debt

Pictet Funds (Europe) S.A.

5/6/2014

Pictet

Pictet - Emerging Corporate Bonds

Pictet Funds (Europe) S.A.

5/6/2014

Pictet

Pictet - Emerging Local Currency Debt

Pictet Funds (Europe) S.A.

5/6/2014

ACMBernstein SICAV

Asia Multi-Asset Income Portfolio

AllianceBernstein (Luxembourg) S.a.r.l.

30/5/2014

ACMBernstein SICAV

Asia Pacific Equity Income Portfolio

AllianceBernstein (Luxembourg) S.a.r.l.

30/5/2014

ACMBernstein SICAV

Low Volatility Equity Portfolio

AllianceBernstein (Luxembourg) S.a.r.l.

30/5/2014

Income Partners Investment Fund

 

Income Partners Asset Management (HK) Limited

27/5/2014

Income Partners Investment Fund

Income Partners RMB Bond Fund

Income Partners Asset Management (HK) Limited

27/5/2014

BlackRock Global Funds

ASEAN Leaders Fund

BlackRock (Luxembourg) S.A.

22/5/2014

BlackRock Global Funds

Asian Growth Leaders Fund

BlackRock (Luxembourg) S.A.

22/5/2014

BlackRock Global Funds

Asian Local Bond Fund

BlackRock (Luxembourg) S.A.

22/5/2014

BlackRock Global Funds

Emerging Markets Corporate Bond Fund

BlackRock (Luxembourg) S.A.

22/5/2014

BlackRock Global Funds

Emerging Markets Investment Grade Bond Fund

BlackRock (Luxembourg) S.A.

22/5/2014

BlackRock Premier Funds

BlackRock China A-Shares Fund

BlackRock Asset Management North Asia Limited

29/4/2014

UBS (Lux) Key Selection SICAV

 

UBS Fund Management (Luxembourg) S.A.

3/4/2014

UBS (Lux) Key Selection SICAV

UBS (Lux) Key Selection SICAV - Emerging Markets Income (USD)

UBS Fund Management (Luxembourg) S.A.

3/4/2014

Wells Fargo (Lux) Worldwide Fund

Wells Fargo (Lux) Worldwide Fund - Emerging Markets Equity Fund

RBS (Luxembourg) S.A.

1/4/2014

Wells Fargo (Lux) Worldwide Fund

Wells Fargo (Lux) Worldwide Fund - U.S. Premier Growth Fund

RBS (Luxembourg) S.A.

1/4/2014

Manulife Global Fund

Manulife Global Fund - Greater China Opportunities Fund

Self-Managed

28/3/2014

AXA World Funds

AXA World Funds - Framlington American Growth

AXA Funds Management S.A.

13/3/2014

AXA World Funds

AXA World Funds - Framlington Emerging Markets

AXA Funds Management S.A.

13/3/2014

AXA World Funds

AXA World Funds - Framlington Euro Relative Value

AXA Funds Management S.A.

13/3/2014

AXA World Funds

AXA World Funds - Framlington Global Convertibles

AXA Funds Management S.A.

13/3/2014

AXA World Funds

AXA World Funds - Global Inflation Bonds

AXA Funds Management S.A.

13/3/2014

AXA World Funds

AXA World Funds - Universal Inflation Bonds

AXA Funds Management S.A.

13/3/2014

AXA World Funds

AXA World Funds - US High Yield Bonds

AXA Funds Management S.A.

13/3/2014

Franklin Templeton Investment Funds

Franklin Global High Income Bond Fund

Franklin Templeton International Services S.a.r.l.

4/3/2014

Franklin Templeton Investment Funds

Franklin Global Listed Infrastructure Fund

Franklin Templeton International Services S.a.r.l.

4/3/2014

HSBC Collective Investment Trust

 

HSBC Investment Funds (Hong Kong) Limited

3/3/2014

HSBC Collective Investment Trust

HSBC RQFII Chinese Fixed Income Fund

HSBC Investment Funds (Hong Kong) Limited

3/3/2014

Manulife Advanced Fund SPC

Asia Pacific Income and Growth Segregated Portfolio

Manulife Asset Management (Hong Kong) Limited

25/2/2014

Allianz Global Investors Fund

Allianz Europe Equity Growth Select

Allianz Global Investors Luxembourg S.A.

11/2/2014

Allianz Global Investors Fund

Allianz Global Small Cap Equity

Allianz Global Investors Luxembourg S.A.

11/2/2014

Investec Global Strategy Fund

Emerging Markets Multi-Asset Fund

Self-Managed

10/2/2014

Investec Global Strategy Fund

Global Multi-Asset Income Fund

Self-Managed

10/2/2014

UBS (Lux) Equity SICAV

UBS (Lux) Equity Sicav - Emerging Markets High Dividend (USD)

UBS Fund Management (Luxembourg) S.A.

30/1/2014

UBS SDIC Investment Funds

 

UBS SDIC Asset Management (Hong Kong) Company Limited

28/1/2014

UBS SDIC Investment Funds

UBS SDIC China Income Fund

UBS SDIC Asset Management (Hong Kong) Company Limited

28/1/2014

Neuberger Berman Investment Funds plc

 

Self-Managed

22/1/2014

Source: SFC