HONG KONG: Amendments to Code on Unit Trusts and Mutual Funds Take Effect

Tuesday February 3 2015

The Securities and Futures Commission (SFC) has announced that amendments to the Code on Unit Trusts and Mutual Funds took effect on 30th January 2015.

The amendments were made to implement proposals to give public funds greater flexibility in determining the means for making public their offer and redemption prices, net asset values and notices of dealing suspension.

The amendments include the following areas:

The means of making public Prices or NAVs

The SFC has removed the requirement that mandates the use of newspapers to publish Prices or NAVs and will now allow Schemes to use any appropriate means to make public their Prices or NAVs.

In determining the appropriate manner of making public Prices or NAVs, management companies of Schemes should ensure that (i) holders or prospective investors can have free access to such information; (ii) disclosure is consistent with the manner and frequency at which the units are dealt in; and (iii) dedicated channel of dissemination is specified in the offering document.

The frequency of making public Prices or NAVs

The SFC will require Schemes to make public their Prices or NAVs on every dealing day. The means of dissemination may include newspapers, telephone hotlines and websites.

The means of the publication of dealing suspension notices

The SFC has again removed the requirement that mandates the use of newspapers to publish a dealing suspension notice and allow Schemes to use any appropriate means (for example websites) in doing this. The frequency of publication has remained unchanged.

Miscellaneous amendments

To maintain consistency in wording adopted by other codes and guidelines issued by the SFC, a technical amendment is also proposed to be made to the Code and the Overarching Principles Section (Overarching Principles Section) of the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products by adding that the SFC may modify or relax the application of a requirement therein if the SFC considers that, in particular circumstances, strict application of the requirement would operate in an unduly burdensome or unnecessarily restrictive manner.

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