Hong Kong, Luxembourg Agree To Create Mutual Funds Recognition Accord
The jurisdictions have inked a deal under which funds from both locations can be offered, sold and distributed to clients in each region, a pattern of co-operation seen in a number of countries around the world.
The Securities and Futures Commission of Hong Kong and the Commission de Surveillance du Secteur Financier of Luxembourg yesterday signed a memorandum of understanding to build a mutual funds recognition regime.
“Luxembourg and Hong Kong have a long-standing tradition of cooperation. In recognition of the strength and quality of the UCITS regulatory framework, as well as the level of investor protection that it offers, many asset managers in Hong Kong have established UCITS funds which they have managed and distributed in the EU or in Asia for quite some time,” Denise Voss, chairman of the Association of Luxembourg Funds Industry, said.
“This MoU will prove very useful to asset managers and will help to deepen the existing bonds between the two jurisdictions,” Voss said.
(Editor's note: Ironically, the announcement comes on a day when UK parliamentarians are due to vote on the government’s proposed way of leaving the European Union. A key debating point in the UK financial services sector are concerns that the UK could be frozen out of a post-Brexit fund management sector. The fact that jurisdictions such as Luxembourg and Hong Kong (which is n’o in the EU) can sign MoUs to encourage mutual fund recognition regimes might suggest that some of those worries are misplaced.)