CSSF And HK Securities And Futures Commission Signed MoU On Mutual Recognition Of Funds

On 15 January 2019, the CSSF announced that the Securities and Futures Commission (SFC) and the CSSF entered into a Memorandum of Understanding (MoU) on Mutual Recognition of Funds (MRF), which will allow eligible Hong Kong (HK) public funds and Luxembourg UCITS funds to be distributed in each other's market through a streamlined process. The SFC and the CSSF may consider extending the MRF to include other types of funds in future in accordance with the MoU.

HK Covered Funds (i.e. Hong Kong-domiciled funds that are eligible for CSSF authorisation or have received CSSF authorisation under the MRF) must be established, domiciled and managed by a HK Covered Management Company in accordance with HK laws and regulations and its constitutive documents and authorised by the SFC under section 104 of the SFO for public offering in HK to be eligible. It covers the following types of funds (i) a general equity fund, bond fund or mixed fund or (ii) a feeder fund where the underlying fund falls within one of the types mentioned in (i). The HK Covered Fund must not invest in (i) physical commodities including precious metals or commodity based investments or real estate, (ii) crypto-assets or crypto-currencies, or (iii) certificates representing the assets referred to under (i) or (ii). The HK Covered Fund must not use leverage (arising from derivatives) exceeding 100% of the fund's net asset value as calculated under the commitment approach provided under the Code on Unit Trusts and Mutual Funds (UT Code).

Prior to...