SFC and FINMA Sign MoU on Switzerland-Hong Kong Mutual Recognition of Funds

The Securities and Futures Commission (SFC) announced today that it has signed a Memorandum of Understanding (MOU) Memorandum of Understanding (MOU) A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is view A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is view Read this Term) with the Swiss Financial Market Supervisory Authority (FINMA) on Switzerland-Hong Kong Mutual Recognition of Funds and Asset Managers. This will enable eligible Swiss and Hong Kong public funds to be distributed in each other’s market through a streamlined vetting process.

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Mutual Recognition of Funds

The MoU also establishes a framework for Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term of information, regular dialogue as well as regulatory cooperation in relation to the cross-border offering of public funds.

SFC Chairman, Mr Carlson Tong, commented: "This pioneering initiative, whereby home-grown Hong Kong funds – for the first time – gain direct access to the investing public in a European market, is a testament to Hong Kong’s commitment to develop the city into an international asset management centre.”

The mutual recognition of funds scheme is expected to create new opportunities for the Swiss and Hong Kong asset management industries as well as providing investors in both markets with a broader selection of fund products.

Criteria

Swiss funds applying for SFC authorisation have to meet a number of eligibility requirements. These include that funds must be established, domiciled and managed in accordance with Swiss laws and regulations and that they have been defined and approved by FINMA as securities funds in accordance with Article 53 – 57 CISA for public offering in Switzerland.

Additionally, Hong Kong funds applying for FINMA approval must be SFC-authorised funds domiciled and managed in Hong Kong, as well as meeting FINMA’s requirements for Hong Kong funds.