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Hong Kong domiciled hedge funds are changing tack to meet regulatory requirements

Thursday, December 20, 2012

From Precy Dumlao, Opalesque Asia – The majority of hedge funds available in Hong Kong are shifting gears towards UCITS and domiciled either in Ireland of Luxembourg, reported Asia Asset. More often, these funds are tailored to meet the disclosure requirements in the former British colony.

But Hong Kong domiciled funds enjoy some advantage because they avoid the hassle of going back to their "mother units" to seek approval of any amendments. A locally-domiciled platform enjoys wider opportunity to meet Hong Kong’s standards in disclosure requirements and other regulations.

More importantly, locally-domiciled hedge funds provide more opportunities for its product issuers, the report added.

A clear advantage for local issuers is the new rule imposed by Hong Kong market regulator that requires an Approved Pooled Investment Fund for sale to MPF (mandatory provident fund) local retirement schemes to be Hong Kong domiciled.

Also, a big number of fund houses are setting up shop and registering their Hong Kong domiciled funds to take advantage of a new rule that makes real estate properties no longer eligible investments for the Immigration Department's Capital Investment Schemes, the report added.

According to Asia Asset, Hong Kong's Financial Services Treasury Bureau suggested a mutual recognition with the China Securities Regulatory Commission that will push for Hong Kong domicil......................

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