The number of equity mutual funds authorised in Hong Kong is falling, while index and bond funds are on the increase, according to the city’s regulator.
As of the end of June there were 975 authorised equity unit trust and mutual funds in Hong Kong, down one from March 31 and down 39 from June last year, the Securities and Futures Commission (SFC) said in its quarterly report. The number of funds of funds also fell, to 86 from 91 and 94 over the same period.
The bond fund count increased to 372 from 355 in March and 359 in June last year, while the number of index products rose to 146 from 140 and 130 over the same period. There were 98 diversified funds in June, up from 91 and 85 in March this year and June last year, respectively.
Hong Kong is home to a total of 1,961 SFC-authorised unit trusts and mutual funds including umbrella structures, up 1.3% on the quarter but down 0.1% year-on-year.
The news comes as firms have their sights on the mutual recognition scheme between Hong Kong and China. For example, Baring Asset Management announced in June plans to launch a Hong Kong-domiciled funds range, as reported.
The city is on a quest to become a funds hub, which could challenge Ucits structures, though Marc Saluzzi recently dismissed such a threat.
The number of Luxembourg-domiciled funds in Hong Kong fell to 980 in June from 1,035 in June last year, while that for Hong Kong-domiciled funds increased to 494 from 435 over the same period. Ireland-domiciled funds numbered 276, flat from 275 in mid-2013.
Meanwhile, the SFC detected 298 code and regulation breaches during on-site inspections in the second quarter, up from 288 the preceding quarter and 240 in the second quarter of 2013. Notably, breaches of online trading codes increased to 81 in the second quarter from 64 in the first quarter.
In the second quarter, the regulator prosecuted 10 individuals or corporations for misconduct and disciplined 17 licensees. Fines totalled more than $39 million.