HSBC — which recently announced its intention to focus more in Asia, and China in particular, to boost its business — is gearing for next month’s implementation of the Mutual Recognition of Funds or MRF between Hong Kong and mainland China.
HSBC has recently agreed with Chinese lender Bank of Communications (BoCom) to work together in fund distribution and agency services, the British lender said in a statement.
“By fully leveraging the combined strengths of HSBC’s global connectivity and BoCom’s strong presence in mainland China, we are even better positioned to offer premium services to customers in the Mainland and Hong Kong. Preparations are underway in line with governing rules and regulations, and we will look to launch new products and services soon,” said Helen Wong, chief executive for Greater China at HSBC.
Under the MRF, Hong Kong-domiciled funds will be allowed to sell mutual fund products to Chinese retail investors and vice-versa. An initial quota of 300 billion yuan ($48.4 billion) has been put in placed each for Hong Kong and the mainland.
About 850 Chinese funds and 100 from the former British colony were eligible to participate in the scheme that will start on July 1.
This will be the first time that offshore funds will be allowed to tap investors in the mainland as part of the Chinese government’s efforts to open up its capital market and internationalize its currency, the renminbi.
“It (MRF) will provide greater options for investors and help advance the development of mainland China’s asset management sector, while acting as another catalyst for RMB internationalization,” HSBC’s Wong said.
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