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Hong Kong and Thailand plan MRF scheme

The SFC has also signed similar agreements with Netherlands, mainland China, Switzerland, the UK, Luxembourg and France.

Hong Kong’s Securities and Futures Commission (SFC) and the Securities Exchange Commission of Thailand (SEC) have signed a memorandum of understanding (MoU) on Mutual Recognition of Funds (MRF) to allow locally-domiciled Hong Kong and Thai public funds to be distributed in each other’s markets, according to a statement from the Hong Kong regulator yesterday.

The MoU establishes a framework for exchange of information, regular dialogue as well as regulatory cooperation in relation to the cross-border offering of eligible Hong Kong and Thai funds, the statement noted.

Both regulators aim to launch the MRF within six to 12 months, the statement said. The SEC and the SFC have also published circulars in their respective markets to outline which funds are eligible under the MRF.

To access the SFC circular on eligible funds in Thailand, click here.

To access the SEC circular on eligible funds in Hong Kong, click here.

For example, eligible funds under the MRF scheme may include equity funds, bond funds, mixed-asset funds, feeder funds, unlisted index funds and passively managed index-tracking ETFs, according to the MoU.

Meanwhile, Hong Kong-domiciled money market funds, hedge funds, fund of hedge funds, structured funds and active ETFs are not eligible for sale in Thailand under the MRF, according to the SFC circular.

“The Mutual Recognition of Funds initiative will deepen economic cooperation between Hong Kong and Thailand.  More importantly, it will promote the competitiveness of local intermediaries in the international arena while enriching the types of fund products offered to investors,” Ruenvadee Suwanmongkol, Thai SEC’s secretary-general, said in the statement.

The Hong Kong’s regulator has also signed similar agreements with other markets. Most recently, in May 2019, the SFC also signed a MoU with Dutch Authority for Financial Markets (AFM) to allow eligible Hong Kong Collective Investment Schemes and Dutch Undertakings for Collective Investment in Transferable Securities (Ucits) can be distributed in each other’s market subject to case-by-case authorisation.

Before that, Hong Kong reached similar agreements with mainland China, Switzerland, the UK, Luxembourg and France.

Part of the Mark Allen Group.