ENG-2020 — Page 103

Chart 4

2,000

No of Companies

4

Financial and Monetary Affairs

Number of Asset Management Companies

1,914

1,844

1,600

1,678

1,513

1,200

1,340

800

400

2016

2017

2018

Year

2019

2020

Leveraging Hong Kong's world-class financial infrastructure, the government works with other agencies to develop the asset and wealth management sector. This includes providing a conducive operational, regulatory and tax environment and improved access to other markets to grow a full spectrum of asset and wealth management activities. It also includes diversifying fund structures and expanding the fund distribution network.

ETF Market Structure

As part of enhancements to the structure of the ETF market, a new spread table and continuous quoting market making obligations for ETFs were implemented in June. A waiver of stamp duty on Hong Kong stock transfers payable by ETF market makers when creating and redeeming ETF units took effect in August. In October, price limits of plus or minus 15 per cent on ETFs during the pre-opening session on their first trading day were implemented.

Open-ended Fund Company Structure

Enhancements to the open-ended fund company (OFC) regime took effect in September. Among other changes, private OFCs are no longer subject to investment restrictions and the eligibility requirements for the custodians of private OFCs have been expanded to include licensed or registered securities brokers. The first SFC-authorised ETF structured as a public OFC was listed in January.

New Limited Partnership Fund Regime

The new limited partnership fund regime, which enables funds to be registered in the form of limited partnerships in Hong Kong, commenced operation in August.

Mutual Recognition of Funds

The SFC has established Mutual Recognition of Funds (MRF) arrangements with regulators in the Mainland, Australia, France, Luxembourg, Malaysia, the Netherlands, Switzerland, Taiwan and the United Kingdom. The SFC is also in discussion with other overseas regulators to establish MRF arrangements. As at the year end, 79 funds had been authorised under the Hong Kong- Mainland MRF arrangement, enabling cumulative net sales of more than RMB14.7 billion.

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