Three Hong Kong domiciled funds and four China funds received regulatory approval under the Mainland-Hong Kong Mutual Recognition of Funds (MRF) scheme on Friday (December 18).
The three northbound funds approved for Mainland distribution are the Hang Seng China H-Share Index Fund, the ZEAL Voyage China Fund, and the JP Morgan Asian Total Return Bond Fund.
The four southbound vehicles are the ChinaAMC Return Securities Investment Fund, the ICBCCS China Core Value Mixed Fund, the HSBC Jintrust Large Cap Equity Securities Investment Fund, and the GF Industry Leaders Mixed Assets Fund.
Since the MRF scheme came into force on July 1, a total of 17 Hong Kong domiciled funds have applied for public offerings in China, while 30 Mainland funds have submitted applications for Hong Kong distribution.
The China Securities Regulatory Commission (CSRC) stated on its website that the bureau and the Securities and Futures Commission (SFC) would continue to register other funds under the MRF in the future.
Hong Kong Investment Funds Association (HKIFA) Chairman Terry Pan earlier commented that he expects “more than a few” funds to be approved for the scheme by the year’s end, adding that it would take two months for the funds to be set up for distribution in new markets.
Michael Falcon, chief executive officer, Asia Pacific at JP Morgan Asset Management, said the firm is excited to be one of the first asset management companies to be approved under the MRF scheme. “More importantly, through this programme investors can benefit from better diversification and, consequently, improved risk management in their portfolios,” he noted.
According to the MRF arrangement, qualified PRC and Hong Kong funds may be offered directly to the public in each other’s market after obtaining authorisation or approval under streamlined procedures. Currently, there are approximately 100 Hong Kong domiciled funds and 850 Mainland funds eligible to apply for MRF status.
