Asia continues to lag other regions for integrating ESG principles with investing; better data and stronger regulatory requirements will help institutional investors, market observers say.
The so-called declaration of mutual recognition seeks to reduce regulatory duplication by allowing most funds registered in Australia for offer to retail investors in Hong Kong, while making available to Australian investors similar funds authorised in Hong Kong. The SFC notes that ASIC-registered funds seeking to be marketed in Hong Kong will still require authorisation from the SFC, but will enjoy a streamlined vetting process.
SFC chairman Eddy Fong says this is the Hong Kong regulatorÆs first such agreement with an overseas counterpart, and the move is expected to boost the territoryÆs status as an international fund offering venue.
ôThis is an important milestone towards international convergence of regulation and stronger regulatory ties and cooperation between the SFC and ASIC,ö says ASIC chairman Tony DÆAloisio. ôNot only does it present exciting marketing opportunities for our respective funds management industry seeking investment flows from the counterpart jurisdiction, it also gives more choices to the Australian and Hong Kong retail public.ö
To facilitate Australian funds to take advantage of mutual recognition, the SFC has issued a set of practical guidelines for the industry. Similarly, ASIC will issue a class order shortly providing Hong Kong authorised funds with a conditional relief from registration in Australia and from certain licensing, product disclosure and fund-raising requirements.
Mutual recognition is extended to authorised collective investment schemes that are regulated primarily by the SFC and managed by SFC-licensed managers, as well as ASIC-registered financial asset schemes except hedge funds.
The deal also covers information sharing and regulatory co-operation regarding these fund activities.
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