Valsen Fiduciaries Funds

Hong Kong MRF - Recognized Mainland Fund

The Hong Kong Securities and Futures Commission (SFC) and China securities regulatory commission (CSRC) regulates mutual funds under the Securities and Futures Ordinance. This Act sets out the guidelines pertaining to the application and licensing of Recognized Mainland Fund.

About Hong Kong MRF – Recognized Mainland Fund

MRF-Recognized HK Funds is a scheme jointly launched by the China Securities Regulatory Commission (CSRC) and Hong Kong Securities and Futures Commission (SFC) on 22 May 2015, by signing the Memorandum of Regulatory Cooperation (MORC). China Securities Regulatory Commission (CSRC) and Hong Kong Securities and Futures Commission (SFC) issued Interim Provisions on the Administration of Mutual Recognition Funds in Hong Kong and Mutual Recognition of Funds (MPF) between the Mainland and Hong Kong.

Hong Kong MRF – Recognized Mainland Fund Legal Requirements

Requirements

Description

  1. Applicable legislation

Securities and Futures Ordinance

  1. Supervising Authority

The Hong Kong Securities and Futures Commission (SFC)

China securities regulatory commission (CSRC)

  1. Corporate vehicle permitted

Only licensed:

  • IBC (International Business Company)

  • LP (Limited Partnership)

  • Trust

  • Limited Liability Company

From any recognized jurisdiction by SFC and CSRC

  1. Share capital or equivalent

    • Minimum subscription

The fund must have a minimum fund size of not less than RMB 200 million or its equivalent in a different currency;

    • Minimum investors

None

  1. Directors / Partners / Trustees

    • Minimum number

1

    • Corporate Directors / Partners / Trustees allowed

Yes

    • Local Directors / Partners / Trustees required

Yes

  1. Fund functionaries required

    • Custodian

      • Custodian required

Yes

      • Local custodian required

Yes

      • Eligible custodian

A qualified custodian for publicly offered securities investment funds licensed by the SFC

    • Fund manager / Investment manager

      • Fund manager required

Yes

      • Local fund manager required

Yes

      • Fund manager requires to be licensed

Yes

      • Eligible fund manager

Mainland- Hong Kong licensed fund Manager licensed by CSRC and operated in Hong Kong

Approved Foreign Fund Manager is not allowed unless registered, licensed by CSRC and operated in Mainland Hong Kong.

  • Fund administrator

      • Fund administrator required

Yes

      • Local fund administrator required

Yes

      • Eligible fund administrator

Mainland- Hong Kong licensed fund administrator licensed by SFC and operated in Hong Kong

Approved Foreign Administrator is not allowed unless registered, licensed by SFC and operated in Hong Kong.

    • External auditor

      • External auditor required

Yes

      • Local external auditor required

No

      • Eligible external auditor

Qualified local auditor approved by the either SFC or CSRC

  1. Asset Requirements

    • Restriction on type of asset class invested

None

    • Asset diversification requirements

None

    • Limitation on size of the fund or total assets under management

None
  1. Local physical office required

Yes

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

Yes

  1. License fees

    • License application fee

Licensed Corporation(LC) USD 4,740

    • Annual license fee

Licensed Corporation(LC) USD 4,740

  1. Estimated license processing duration

15 Weeks

Ongoing Obligations

Requirements Description
Monthly obligations
None
Quarterly obligations
None
Annual obligations
None
Other obligations
As a licensed corporation, one is required to notify the SFC of the financial year end within one month upon the grant of License.
Tax Obligations and Other Exemptions
Requirements Description
Business Tax
Exempt
Withholding Tax
Exempt
Value Added Tax (VAT)
None
Stamp duty Act
None
Trades Tax Act
None
Immovable Property Transfer Restriction Act
None
Immigration Decree
None
Exchange Control Act
None
Foreign Earnings Act
None

Benefits of a Hong Kong MRF – Recognized Mainland Fund:

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance
  • Friendly regulatory environment
  • Investing overseas with MRF-Recognized HK Funds helps you capture a diverse range of global investment opportunities and potentially delivers higher returns
  • Multi-currency portfolio