Hong Kong's Securities and Futures Commission (SFC) and France's Autorité des Marchés Financiers (AMF) signed a Memorandum of Understanding (MoU) on France-Hong Kong Mutual Recognition of Funds (MRF), which will allow eligible Hong Kong public funds and French UCITS funds to be distributed to retail investors in each other's market through a streamlined authorization process.
The MoU is the first agreement between Hong Kong and a member of the European Union which establishes the regulatory framework for distribution of eligible Hong Kong and French funds, which currently include general equity funds, bond funds and mixed funds.
It also stipulates a mechanism for regular dialogue and regulatory cooperation thus enabling the SFC and the AMF to fulfil their respective supervisory and regulatory mandates.
"Promoting the development of Hong Kong's asset management industry is one of our strategic objectives", said Mr Ashley Alder, the SFC's Chief Executive Officer.
"This new cooperation framework is an important milestone for Hong Kong's continuous development as an international asset management centre as it opens up the opportunity for Hong Kong funds to be sold in one of the leading markets in the European Union. We look forward to working with the AMF with our strengthened regulatory ties under the MoU," he concluded.
"This newly established bridge between France and Hong Kong constitutes an important breakthrough for the French asset management industry seeking to develop activities internationally," said Mr Gérard Rameix, the AMF's Chairman.
"It reflects the attractiveness of Paris as a financial centre and demonstrates that there is a demand from one of the leading markets in Asia for French asset management companies and products.
"We look forward to the opportunities this agreement will bring to our market, as well as to the enhanced cooperation between the AMF and the SFC to ensure that our industry players operate in a clear and robust supervisory framework and that our investors receive proper protection", Mr Rameix concluded.
Further details of the MRF arrangement are set out in the "SFC circular" and the "AMF requirements and process for mutual recognition of Hong Kong Funds".