The proposed scheme will fail to live up to the hype initially because the size of the opportunity needs to be put into perspective, says Shiv Taneja of Cerulli.
Fund passporting
Asia has three fund passport schemes in the pipeline - HK-China mutual recognition, Asean and ARFP - which promise to change the landscape of the region's funds industry.
An Asean version featuring Malaysia, Singapore and Thailand has been put forward. That is the third Asian passport scheme in eight months as sources see regional rivalry intensify.
It is transferring its fixed income team to Hong Kong, while building in equities. It aims to expand manufacturing, targeting offshore RMB products and cross-border mutual recognition.
The three proposed passport schemes won't remain separate for long, says regional head of business development Chris Taylor. A survey finds fragmented markets managers' top worry.
The SFC’s Alexa Lam and CSRC’s Xu Hao discuss the timing of the HK-China passport scheme, indicating the launch will follow the RQFII model and could be imminent.
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Asset managers will be able to sell Hong Kong-domiciled funds into Europe under the Alternative Investment Fund Managers Directive. But they face a number of issues.
The Swiss firm has just won RQFII approval, but has no current plans to set up Hong Kong-domiciled funds, says Asia-Pacific head Kai Sotorp.
The product range on HK fund platforms must diversify beyond Asian underlyings to boost Chinese interest in mutual recognition, say asset servicers. That will mean more locally based capabilities.
AsianInvestor has identified five key factors that we believe asset managers need to get right if they are to be first past the winning post. Here we reveal choice number 4.
Mutual funds will be the primary focus of the proposed cross-border fund scheme, although China could be receptive to participation by private equity, says Ernst & Young.
Standard Chartered's advice to asset managers creating Hong Kong-domiciled funds to sell into China: create products that are both simple and strongly performing.
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The proposed free trade agreement between Korea and Australia is seen as vital if the Asia Region Funds Passport is to succeed. Digital delivery is a major part of passport discussions.
