Hong Kong SFC Proposes To Relax Fund Disclosure Rules

by Mary Swire, for LawAndTax-News.com, Hong Kong

14 May 2008

The Hong Kong Securities and Futures Commission (SFC) has proposed to exempt SFC-authorised open-ended collective investment schemes organised in corporate form and listed on the Stock Exchange of Hong Kong Limited from the disclosure of interest requirements of the Securities and Futures Ordinance.

At present, the SFC explained, there are no Exchange Traded index-tracking Funds (ETFs) listed in Hong Kong which have been structured in corporate form.

Since this structure is common in other jurisdictions, the proposed amendment will assist the development of Hong Kong’s ETF market by facilitating the listing of ETFs in different forms.

This proposal will also bring Hong Kong’s regulatory requirements in line with international standards and practices in this area.

“We are committed to enhancing Hong Kong’s position as a hub for ETFs in the region and attracting more of these funds to come to Hong Kong and to list on the Stock Exchange. The SFC’s policy is to encourage the development of ETFs in the Hong Kong market,” announced Alexa Lam, the SFC’s Deputy Chief Executive Officer and Executive Director (Policy, China and Investment Products).

Hong Kong ranked first in terms of market capitalisation of ETF in Asia (ex Japan) and registered the highest volume of trading in the region in 2007, the SFC revealed.

The proposed amendments to the Guidelines for the Exemption of Listed Corporations from Part XV of the Securities and Futures Ordinance (Disclosure of Interests) are set out in a recent consultation paper issued by the SFC.

The public are invited to submit comments in writing before 6th June, 2008. Following the consultation, the SFC will publish a conclusions paper to summarise the views collected, and set out the final proposal.

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