After two years as director of investment products at the Securities and Futures Commission's funds division, Tina So is leaving to join BOC International Investment Managers as managing director and CIO. BOC-IIM is a new fund management joint venture between Merrill Lynch Investment Managers and Bank of China International.

So will leave for her new employer's office in Shanghai in mid-July. Her last day at the SFC is June 11.

She joined the SFC from Schroder Investment Management, where she had served as CIO for its Asia business. While at the SFC, So was involved in creating a regulatory framework to allow retail hedge funds and real estate investment trusts, among other tasks. She also played a role in developing hedge fund disclosure criteria and in establishing Hong Kong's capital investment scheme, to attract international high-net worth individuals to the territory. She reported to executive director Alexa Lam.

Her departure will not be a shock to most market participants. So, who is well regarded in the industry, was viewed as a bit of an experiment at the SFC because of her private-sector background. Industry executives say the fit was less than perfect, and that the investment products team was uncomfortable with the conflict between creating a space for retail hedge funds and Reits, and the SFC's determination to place restrictions on these products.

Market players say Andrew Sheng, SFC chairman, sought to slow down the development of retail hedge funds, which has led to disclosure requirements that has discouraged many potential hedge fund managers. And the Reits have also been saddled with requirements such as prohibiting non-Hong Kong properties from being included, all measures that industry players say So had tried to make more industry-friendly. So far neither product is considered a success, although with a little regulatory tweaking they still have a lot of potential.

Industry sources say So had been groomed, at least initially, as a possible liaison to Beijing's China Securities Regulatory Commission, in a similar vein to former SFC executives Barbara Shiu and Laura Cha. But So's apparent desire to return to the private sector is the CSRC's loss and BOC-IIM's gain, although So is at least moving to the mainland.

Speculation will now turn to So's replacement and whether the SFC will reach out again for someone with private-sector nous. Otherwise it has two associate directors in its investment products division who could get the nod. Sandra Mak is well liked by the industry, although in regulatory culture that is sometimes seen as a problem rather than an advantage. Alice Law has experience working with UK law firms in Hong Kong and is said to have been disappointed at not getting the post when So was hired from outside.

A spokesman for the SFC says, "We have to express our gratitude to Ms So for everything she has done for us, and we wish her luck in her new role." He says the vacancy will be filled as soon as possible, and for the time being So's work will be shared by the investment product team.

"The operation of the department will not be affected," he says. As far as recruitment, he initially said the SFC has not yet decided whether to seek external candidates.

BOC-IIM won its prepartory license in December and expects to get its operating license soon. Its CEO is Chen Ru, a managing director at BOC International China Limited, one of two BoC legal entities involved in the JV. Its deputy CEO is David Peng, a managing director at MLIM responsible for its China business. With Tina So as CIO, the JV's remaining senior executive slot to fill is that of compliance officer. Peng says the firm has a candidate in mind.