This undated photo shows the Central district of Hong Kong. (XIE FENG / CHINA DAILY)
HONG KONG – The Hong Kong Investment Funds Association proposed on Tuesday relaxing several requirements for the Mainland-Hong Kong Mutual Recognition of Funds program — moves that would expand the variety of products and entice more funds management companies and mainland investors to participate.
The association’s proposals follow its survey in January and February on fund managers’ attitudes toward the MRF and other cross-border fund programs. Thirty-one companies responded to the survey.
The Hong Kong Investment Funds Association also suggests allowing non-Hong Kong-based funds to be included. Under current regulations, the funds that join the program must be based in Hong Kong
The result shows that about 32 percent of interviewed companies have participated in the Northbound MRF program, in which Hong Kong-based funds are sold on the mainland. Another one-third of the companies were considering participating in it for the first time this year.
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Among the measures that the companies said should be introduced to enhance the program, the top three include removing the Hong Kong domicile requirement and streamlining the approval process.
Twenty companies gave an estimate on the fund flows they can attract over three years. Twelve of them said it would reach $500 million if the requirements are relaxed, while the others expected a higher level, ranging from $1 billion to $5 billion.
The association calls for the Hong Kong government to consider the proposals. Moreover, it also suggests allowing non-Hong Kong-based funds to be included. Under current regulations, the funds that join the program must be based in Hong Kong, HKIFA Chairman Nelson Chow said.
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For the other cross-border funds program, Chow said most respondents thought qualified domestic-related channels might offer their businesses opportunities in the short term.
About 21 percent of companies see the Wealth Management Connect program as having the highest potential in the short term, while 31 percent of the interviewees are more optimistic about its potential over the medium and longer term.
HKIFA CEO Sally Wong suggested more blended funds be covered for the Wealth Management Connect.
aoyulu@chinadailyhk.com