“The Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg and the Securities and Finance Commission in Hong Kong have signed a mutual recognition of funds (MRF) agreement, which simplifies procedures through which Luxembourg Ucits and Hong Kong public funds can be approved in each other’s markets.”
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Luxembourg and Hong Kong have long co-operated in the investment industry and UCITS funds are a major feature of the HK landscape. This is not just a story of European asset managers tapping Asian markets; HK fund managers have long used UCITS to distribute into Europe too.
This agreement deepens that relationship by accelerating and streamlining the registration process and, importantly for future agreements, strengthens regulatory co-operation by creating a framework for the exchange of information and regular dialogue.
At a time when many international agreements are unravelling and globalisation is under pressure, bilateral agreements are more important than ever to ensure that investors get access to the best funds at the best prices.
For Luxembourg and other major fund domiciles, this deepening co-operation underpins the UCITS brand at a time when Asian politicians and regulators are considering setting up competing models. So called “Asian UCITS” are not yet on the market, but UCITS providers and regulators are clearly showing they are not complacent about the possibility of rival brands, and are moving to strengthen their own.
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