Since a public statement by the Hong Kong Securities and Futures Commission (SFC) in January regarding the new Hong Kong-China Mutual Funds Recognition Passport scheme, there have been no additional formal announcements by either the SFC or the China Security Regulatory Commission (CSRC) on the Mainland regarding the scheme’s implementation, although there has been no lack of market commentary and discussion in the industry.

Hong Kong-based asset managers, as well as asset managers based further afield, are viewing this as an opportunity for Hong Kong-domiciled and SFC authorized (likely RMB-denominated) funds to tap into the vast Mainland Chinese domestic retail investor market.

On the other side of the border, this opportunity is seen as an avenue to address Mainland domestic retail investor demand for a greater variety of permissible investment options, as well as an opportunity in the first instance for larger Mainland Chinese asset management companies to be test cases to distribute their products offshore.