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Authored by: Alwyn Li and Raymond Cheng
On 15 March 2023, Hong Kong’s Securities and Futures Commission (SFC) updated their presentation materials on Industry Workshops for ESG funds to provide further guidance on whether it is mandatory for UCITS SFDR Article 8 and 9 funds that are authorised by the SFC in Hong Kong to include the pre-contractual disclosures template in their Hong Kong offering documents (SFDR Template Information).
According to the SFC’s circular to management companies of SFC-authorised unit trusts and mutual funds on ESG funds dated 29 June 2021, the overarching principle is that the Hong Kong offering documents must contain the information that is necessary for investors to make an informed judgement of the investment.
The additional disclosures included in the SFDR Template Information do not in general require the SFC’s prior approval as these are typically treated as disclosure enhancements. The updated bilingual Hong Kong offering documents are post-filed with the SFC pursuant to 11.1B of the Code on Unit Trusts and Mutual Funds. However, there have been some industry concerns as to the volume and the size of the Hong Kong offering document after adding the SFDR Template Information (especially for umbrellas with a large number of sub-funds authorised in Hong Kong). According to the latest SFC guidelines, fund managers can now decide whether they would like to include such information in the Hong Kong offering documents of the relevant UCITS. If the fund manager decides not to include the SFDR Template Information in the Hong Kong offering documents, the information should be made available to investors upon request. The Hong Kong offering documents must also disclose how investors may request the SFDR Template Information and in which language it will be available. For example, the SFDR Template Information can be made available for inspection at the Hong Kong Representative’s office, or on the fund’s website.
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