Securities And Futures Commission Could Block Hong Kong Hedge Funds For Retail Investors

by Carla Johnson, Investors Offshore.com

28 May 2001

Currently there are no authorised hedge funds in Hong Kong. When urged to address the situation, Sandra Mak, associate director of the investment products department at the Securities and Futures Commission (SFC), said if hedge funds become legally recognised in Hong Kong it is highly unlikely that they will be made available to retail investors.

Speaking at the World Hedge Fund conference last week, Ms Mak said that hedge funds would more likely be accessed by professional or institutional investors and high net worth individuals and access to 'any member of the public is not a viable option ... [because] we are quite doubtful if the common retail investor is capable of looking after their own interests and understanding these products.'

However, she insisted that her comments were based on her personal opinion and should not be taken as the official view of the SFC.

According to a report in online new service Hong Kong.com, Ms Mak could not give any indications as to when the SFC may decide to authorise hedge funds in the jurisdiction, but she confirmed that the SFC is 'really thinking about this issue at the moment.'

Although unable to comment at such an early stage on what form the SFC's policies may take, Ms Mak said the SFC will probably take a cautious approach when drawing up its guidelines so it can give investors of all necessary information to enable them to decide on their options. 'To regulate hedge funds in any meaningful way is a great challenge,' she said.

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