HONG KONG: SFC Publish FAQ on Code of Unit Trusts and Mutual Funds

Saturday May 4 2013

On 24 May 2013, the Investment Products Division of the Securities and Futures Commission (SFC) of Hong Kong published a FAQ document, aiming to provide basic information to market practitioners concerning the Code on Unit Trusts and Mutual Funds (UT Code). Applicants are encouraged to contact the relevant case team in the Investment Products Division of the SFC if in doubt on any specific issues arising from the application/interpretation of the UT Code. It should also be noted that the FAQ is for general reference only.

The FAQ covers the following topics:

• Basic Requirements for Fund Authorization;
• Fund`s Structure and Domicile;
• Fund Manager`s Eligibility – Some Practical Issues;General obligations of trustee/custodian;
• Waiver from the UT Code Requirements;
• Authorization of Index Funds;Authorization of structured funds;
• Authorization of structured funds/funds that invest in financial derivative instruments;
• Investment in real estate investment trusts (“REITs”) by SFC-authorized funds;
• Investment in ETFs by SFC-authorized funds;Disclosure of information to investors regarding stock lending, repo and similar over-the-counter transactions;
• Waivers from compliance with certain provisions of the UT Code granted since 1 April 2005; and
• Disclosure of information to investors regarding the fund`s distribution policy.

Please see the below link for more details: