Jeremy Lam hosted a panel discussion which provided an update on the regulatory environment in Hong Kong and the PRC and its impact on product innovation. The discussion commenced with Alwyn Li providing a review of recent UCITS products being authorised in Hong Kong and an overview of some of the regulatory issues encountered during such process. Of particular note was the SFC’s recent reaction to the evolving European debt crisis and their requirement that new funds seeking authorisation restrict their exposure to non investment grade debt securities issued by any one sovereign issuer to 10% of the fund’s net asset value. Issues surrounding payments out of capital and the additional disclosure obligations required by the SFC in such circumstances were also considered as well as ongoing general disclosure obligations relevant to KFS.
Taylor Hui provided an update in connection with RMB bond funds, RQFII funds and the impending launch of RQFII ETFs.
Susan Gordon examined some of the trends in the MPF space where employee choice is leading to more new fund launches. On the retail fund side Susan commented that for clients interested in marketing to Asian investors it may be worth considering a Hong Kong domiciled unit trust authorised by the SFC rather than a UCITS as this may address some of the time to market issues currently faced by UCITS.