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Hong Kong SFC - Authorised 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 SFC – Authorised Fund

SFC – Authorized HK Fund is authorized by the SFC and is marketed to the Hong Kong public. The fund is listed and regularly traded on internationally recognized stock exchanges open to the public. Authorized Fund must comply with the requirements contemplated in the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products. These include a proper structure, well-defined investment guidelines and restrictions, ongoing disclosure requirements and other requirements related to the fund’s daily administration.

Hong Kong SFC – Authorised 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

None

    • 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

No

      • 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

No

      • Fund manager requires to be licensed

Yes

      • Eligible fund manager

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

  • Fund administrator

      • Fund administrator required

Yes

      • Local fund administrator required

No

      • 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

The value of shares/units in the fund sold to investors in Hong Kong shall not be more than 50% of the value of the fund’s total assets.

  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

USD 4,740

    • Annual license fee

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 SFC – Authorised Fund:

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance restrictions
  • Friendly regulatory environment