AUSTRALIA: Australia, Hong Kong sign cross-border fund marketing deal

Monday July 7 2008

The Australian Securities and Investments Commission (ASIC) signed a ‘declaration of mutual recognition’ today with the Hong Kong Securities and Futures Commission (SFC) to facilitate the sale of retail funds to investors in each other’s market. The agreement, a “declaration of mutual recognition” was described by ASIC as seeking to reduce regulatory duplication by allowing most funds registered in Australia available to retail investors in Hong Kong while making available to Australian investors similar funds authorised in Hong Kong. Now that an agreement has been signed, Funds managers in Australia and Hong Kong can sell retail funds into each other’s markets.

To assist Australian funds to take advantage of the changed arrangements, the SFC has issued a set of practical guidelines, while ASIC is expected to be soon issuing a class order with respect to Hong Kong authorised funds. The Mutual recognition is extended to authorised collective investment schemes that are regulated primarily by the SFC and managed by SFC-licensed managers, as well as ASIC-registered financial asset schemes except hedge funds. This agreement seems to follow a pattern similar to that of UCITS which is based on the principles of minimum harmonisation of national legislation, home country control and mutual recognition. In another development, EFAMA’s survey of 28 member fund groups-representing combined assets of €770 billion in UCITS funds, has confirmed the rise of UCITS as a ‘gold standard’ in Asia and other overseas regions. It has also identified the innovative character of UCITS and the high level of investor protection that it offers.

For details of the survey click on the above link.