HSBC has become the trustee to four of the six Hong Kong-domiciled fund approved for distribution in mainland China under the Mutual Recognition of Fund (MRF) scheme.
The first approvals under the scheme were granted in December 2015, and approvals are pending for a further 10 northbound funds.
Northbound net flows for the first six funds totalled RMB 2.76 billion ($410 million) as of June.
Ian Banks, head of securities services for Asia at HSBC, commented: “The northbound distribution of funds from Hong Kong into China through the mutual recognition programme will enrich and diversify the retail fund market in China.”
“We have worked closely with our clients and the regulators to understand the opportunities of this programme. We are pleased to be playing an integral role at the outset of this important industry development.”
Ian Stephenson, global head of fund services at HSBC, added: “China has been gradually transformed from a savings nation to an investment nation with the emergence of middle class and the wealth building up in the last few decades.”
“As a result, there is growing demand for a broader range of investment products, which the MRF programme is well placed to address. In addition to the funds with approvals pending, we are starting to see some large players begin the application process.”
