Hong Kong securities regulator to reform retail fund rules from next month
Hong Kong's Securities and Futures Commission will implement revised rules for retail funds from next month, including a new value-at-risk calculation method and updated liquidity risk management standards, to align with international norms and enhance investor protection.
Hong Kong's Securities and Futures Commission (SFC) will begin implementing enhanced regulatory measures for the city's retail fund industry from next month, following the gazetting of amendments to the Code on Unit Trusts and Mutual Funds. The changes are designed to strengthen investor protection and align Hong Kong's regulatory framework with international standards.
The package of measures includes introducing a value-at-risk (VaR) calculation method alongside the existing net derivative exposure approach. This is intended to support a wider range of fund strategies and enrich the product choices available to retail investors. The SFC will also refine liquidity risk management requirements to bring them into line with updated global norms, and strengthen rules governing money market funds.
Wu Ka Lai, Executive Director of the SFC's Investment Products Division, said the reforms would improve investor protection and help keep Hong Kong's retail fund regime up to date. "The optimisation measures will enhance investor protection and help drive the Hong Kong retail fund regime to keep pace with the times, ensuring it remains competitive," she said.
Existing SFC-authorised funds will generally be granted a 12-month transition period from the effective date of the revised code to comply with the new requirements.