The Securities and Futures Commission (SFC) and the Securities and Exchange Commission of Thailand (SEC) have entered into a Memorandum of Understanding (MoU) on Mutual Recognition of Funds (MRF) to allow eligible Hong Kong and Thai public funds to be distributed in each other’s market through a streamlined process.
The MoU establishes a framework for exchange of information, regular dialogue as well as regulatory cooperation in relation to the cross-border offering of eligible Hong Kong and Thai funds.
In addition, the two regulators have agreed to expedite the approval process of a local feeder fund investing in an MRF-eligible Thai or Hong Kong master fund and to clarify how they may be operated in a streamlined manner.
“This new cooperation framework signifies a major expansion of our MRF network in Asia. It opens up new business opportunities for fund management firms and broadens cross-border investment channels and choices for investors,” said Mr. Ashley Alder, the SFC’s Chief Executive Officer.
“This bilateral agreement marks another significant milestone in the bilateral cooperation between Hong Kong and Thailand, following the Memorandum of Understanding on the Strengthening of Economic Relations between the two governments, signed on 29 November 2019” said Ms. Ruenvadee Suwanmongkol, the Thai SEC’s Secretary-General.
“The Mutual Recognition of Funds initiative will deepen economic cooperation between Hong Kong and Thailand. More importantly, it will promote the competitiveness of local intermediaries in the international arena while enriching the types of fund products offered to investors.” Ms. Suwanmongkol added.
The cooperation arrangements set out in the MoU come into effect today, save for the mutual recognition of funds scheme which both regulators will endeavour to take all actions necessary to implement within six to 12 months following the signing of the MoU. Further details of the mutual recognition of funds scheme are set out in the SFC circular and the SEC circular issued today.