Global fund flow data continue to favour developed over emerging market equities, with Asian funds suffering outflows through to the last week of July. Despite the pressure on local assets, the Asian fund industry is awash with news suggesting the future stays bright for asset managers.
In July, the Hong Kong fund industry regulator reported on the initial joint study with its Chinese counterparts concerning a mutual recognition fund platform. The six-month study focused on the compatibility of the two regulatory frameworks, Hong Kong and mainland China, and concluded that both offered equal protection to investors. This is the first step in establishing a mutual recognition platform that allows qualifying funds in Hong Kong and China to be sold between the two jurisdictions. It is a milestone.
As is common with financial liberalisation involving China, rules and requirements are released incrementally and no specific timetable has been set. Details disclosed by the Hong Kong regulator include the requirement that Hong Kong-registered funds will also need to be domiciled in Hong Kong.