ENG-2018 — Page 104

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Financial and Monetary Affairs

Hong Kong, up 2.6 per cent from a year earlier and 126 per cent from five years ago. Fund domiciliation builds up Hong Kong's fund manufacturing capabilities by driving demand for professional services along the whole value chain, including fund management, investment advice, legal and accounting services, and sales and marketing.

Number of Asset Management Companies

Chart 5

2,000

1,600

No of Companies

1,678

1,513

1,200

1,340

1,177

1,074

800

400

0

2014

2015

2016

Year

2017

2018

Leveraging the world-class financial infrastructure of Hong Kong, the government, together with other agencies, promotes the development of Hong Kong's asset and wealth. management sector through a multi-pronged approach. This includes working to provide a conducive operational, regulatory and tax environment as well as improved access to other markets, thereby growing a full spectrum of asset and wealth management activities. This also includes diversifying fund structures and expanding the fund distribution network.

Open-ended Fund Company Structure

In July, a new open-ended fund company regime took effect, introducing a new corporate fund structure in addition to the unit trust. The structure allows funds to be set up in the form of companies but with the flexibility to create and cancel shares for investors' subscription and redemption in the funds. It broadens the choice of investment fund vehicles and makes Hong Kong a more attractive fund domiciliation location.

Mutual Recognition of Funds

In October, the SFC and the United Kingdom's Financial Conduct Authority signed a Memorandum of Understanding on Mutual Recognition of Funds (MRF) to allow the distribution of eligible public funds in each other's market through a streamlined process. Apart from the UK, Hong Kong has MRF arrangements with the Mainland, France, Luxembourg and Switzerland. As at the year end, 67 funds had been authorised under the Hong Kong-Mainland MRF arrangement, enabling aggregate net sales of more than RMB9.45 billion.

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