Chinese and HK state investors may well expect private fund firms to use the new limited partnership regime, for which a proposal is imminent, says a lawyer involved in the process.
Last week mainland regulators handed private fund management licences to Invesco and Value Partners, and eased foreign-ownership limits on financial services firms.
Beijing's new draft rules for private funds do not mention regulating these products' investing into non-standard assets, which could let them conduct corporate lending, said observers.
Consultancy CompliancePlus has raised concerns about Hong Kong's proposed rules for a new open-ended fund structure in its submission to the regulator.
Mainland hedge fund Zexi Investment and its head, Xu Xiang, have been blacklisted – and sources say more big cases are about to break.
The fund house is the first foreign firm to win approval to manufacture private funds for onshore institutional and high-net-worth clients. And further licences are in the pipeline.