HSBC acts as trustee to four approved MRFs
HSBC Securities Services is acting as trustee to four of the six Hong Kong-domiciled funds approved to date for distribution in mainland China under the Mutual Recognition of Funds (MRF) scheme.
The scheme has made steady progress since the first approvals were granted in December 2015, with northbound net flows for the six funds already totalling RMB2.76 billion (USD410 million) to June this year.
With a further 10 northbound fund approvals pending, the total assets under management could exceed RMB66.5 billion (USD10 billion) in due course. Other managers are also likely to firm up plans over the next few quarters.
Ian Banks, head of securities services, Asia at HSBC, says: “The northbound distribution of funds from Hong Kong into China through the mutual recognition programme will enrich and diversify the retail fund market in China. We have worked closely with our clients and the regulators to understand the opportunities of this programme. We are pleased to be playing an integral role at the outset of this important industry development.”
Ian Stephenson, global head of fund services at HSBC, adds: “China has been gradually transformed from a savings nation to an investment nation with the emergence of middle class and the wealth building up in the last few decades. As a result, there is growing demand for a broader range of investment products, which the Mutual Recognition of Funds programme is well-placed to address. In addition to the funds with approvals pending, we are starting to see some large players begin the application process.”