FAQs – Mainland-Hong Kong Mutual Recognition of Funds: Frequently Asked Questions (FAQs) on Mainland-Hong Kong MRF

The Securities and Futures Commission of Hong Kong (SFC) published revised Frequently Asked Questions (FAQs) on Mainland-Hong Kong Mutual Recognition of Funds. The FAQs outline, among other things, the eligibility requirements for being recognized as a mutually recognized fund (MRF), ongoing operations requirements, disclosure requirements for MRF funds, licensing requirements of the Hong Kong representative of a Mainland fund, and distribution and sales obligations in each other’s markets. Also included is an appendix which provides „illustrative examples of risk disclosures in the Hong Kong covering document of a Recognised Mainland Fund“.
This latest revised version contains a new FAQ under Subpart A, page 4 relating to eligibility requirements which reads as follows – as quoted:
FAQ 5B: Would the CSRC’s prior approval be required for setting up a new share class for offering to Mainland investors by a Recognised Hong Kong Fund which has already been registered with the CSRC?
Answer: The CSRC’s approval is not required to set up a new share class for offering to Mainland investors by a Recognised Hong Kong Fund which has already been registered with the CSRC. The management firm should update the Mainland offering documents and notify Mainland holders about setting up such new share class in accordance with the applicable Mainland rules and regulations. A proper audit trail should also be maintained by the management firm.