Mainland and Hong Kong Mutual Recognition of Funds (MRF) - A new era for asset management in China and Hong Kong

June 2015

On 22 May 2015, the China Securities Regulatory Commission (“CSRC”) and the Securities and Futures Commission ("SFC") in Hong Kong signed the Memorandum of Regulatory Cooperation on Mutual Recognition of Funds between Mainland China and Hong Kong (“Memorandum”). The Memorandum sets out the key principles and operational requirements under the Mutual Recognition of Funds ("MRF") which will be implemented on 1 July 2015 and lays a foundation for the strengthening of financial and regulatory ties towards greater integration of the Asian asset management industry.

MRF signifies an opportunity that international asset management companies have long been waiting for: the ability to distribute investment funds within the Hong Kong and Mainland retail markets. It is a defining moment for international asset managers where Hong Kong can now operate as a gateway for asset managers to China and for the first time, China’s rapidly expanding population of investors is directly accessible to foreign funds.

In this newsletter, we share our insights into how you can prepare your market entry and expansion strategies, and outline some of the key areas you need to consider when planning for MRF.

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