2017年2月28日
資訊洞見
On 9 October 2015, Hong Kong’s Securities and Futures Commission (SFC) announced a revamped authorisation process for public funds. The new process, to be launched on 9 November 2015, will be divided into two streams: standard applications and non-standard applications. After submitting an initial application, the SFC will decide within five working days as to whether the application will be formally accepted. Thereafter, the SFC will give the first round of comments within 14 working days and also indicate under which stream the application will be processed.
As applicants may be aware, the SFC currently specifies a six months processing time from formal acceptance for new fund applications, after which time the application will lapse if authorisation has not been granted. Under the new authorisation process, the standard application process (nicknamed the fast track) will seek to reduce the processing time to within one to two months thereby significantly reducing the “time to market” for new product launches. Based on the SFC’s latest FAQs, it is possible that the SFC may approve a fund application at the end of the 14 day period for first round comments.
The fast track will be available to an applicant who is adding new sub-funds to an existing SFC authorised umbrella, and the service providers such as the manager, its delegates, the trustee and/or the custodian are already approved by the SFC and managing other SFC authorised funds.The new sub-fund should be either a plain vanilla fund to be authorised under Chapter 7 of the Code on Unit Trusts and Mutual Funds; or a UCITS fund which does not use financial derivative instruments extensively for investment purposes; or a physical ETF / index tracking fund tracking an existing SFC-approved index. The fund documents will need to be in good order before the SFC will formally accept and process the application under the fast track. To assist applicants in preparing good quality submissions, the SFC has issued a new Guide on Practices and Procedures, Information Checklist and FAQs.
As regards non-standard applications, these will be processed in a similar way to existing applications, but the SFC plans a quicker turnaround time and the same is expected from the applicants. The aim is to reduce the review processing time and to approve non-standard new fund applications within two to three months. If applicants wish to take advantage of the fast track, they should submit the application after the launch date of 9 November 2015. Applications submitted before the launch date will be processed under the existing authorisation process. Applications of PRC funds under the mutual recognition scheme are already processed under a streamlined process – as such, there will be no change to the current practice for these funds.
The fast track will be welcomed by the industry. However, applicants will need to be mindful that under the new system, the SFC will become more reliant on various confirmations and certifications to be provided by the managers as well as the trustees and custodians. Applicants and product issuers should ensure that a robust compliance system is in place to address all the SFC’s requirements. The SFC is seeking to work together with applicants to achieve reduced processing times.
The revamped authorisation process will be adopted for a six months pilot period ending 8 May 2016. The SFC may consider further changes / new arrangements at the end of the pilot period.
Deacons’ partner Jeremy Lam was recently interviewed by Ignites Asia, a Financial Times publication, on the new streamlined process.
