Hong Kong's SFC Mulling Changes To Regulation Of Fund Sector

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

20 January 2005

Speaking to the FinanceAsia news service this week, executive director of intermediaries and investment products with the Hong Kong Securities and Futures Commission, Alexa Lam revealed that the SFC has five key priorities in its campaign to reform the regulation of the fund sector over the coming years.

The first priority, according to Ms Lam, is to fine-tune the rules governing hedge funds, for instance by making the experience requirements for hedge fund managers more flexible, in order attract more of the popular funds to establish in the jurisdiction.

In addition, although a review showed that market-timing practices are uncommon in Hong Kong, she revealed that the Commission will continue to monitor the fund sector and impose fines when necessary, in order to ensure that unscrupulous traders do not seek to take advantage of times when the Asian market windows vary.

The SFC official also told FinanceAsia that the SFC is reviewing the regulations which govern real estate investment trusts, and is working with mutual funds to ensure that they are regulated to the same standard as their European counterparts, which are set to come under the Ucits-3 regulatory standards.

Finally, she revealed that the Commission wants to assist the fund industry in Hong Kong in taking advantage of the opportunities afforded by the Chinese mainland, and is looking into ways to make this happen.

Ms Lam also pledged to clear up the confusion caused by a consultation paper on the taxation of offshore funds issued in December, announcing that:

"We need to deal with this issue and eliminate uncertainties."

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