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Laxman Pai, Opalesque Asia:

Hong Kong's Securities and Futures Commission (SFC) and Luxembourg's Commission de Surveillance du Secteur Financier (CSSF) have entered into a memorandum of understanding (MoU) on the mutual recognition of funds (MRF).

The agreement will allow eligible Hong Kong public funds and Luxembourg UCITS funds to be distributed in each other's market through a streamlined process.

With the new agreement, funds that are already authorized by the HKSFC will be able to earn faster approvals from the CSSF to be sold in Luxembourg and vice versa.

Hong Kong funds can be either a general equity fund, bond fund or mixed fund; or a feeder fund where the underlying fund falls within one of these fund types.

Over the years, the HKSFC has signed several similar agreements with regulators in mainland China, Malaysia, France and the UK.

Chinese media quoted SFC chief Ashley Alder as saying: "The new cooperation framework expands our MRF network following Mainland China, Switzerland, France and United Kingdom. It further strengthens our ties and regulatory cooperation with Luxembourg, a major hub for fund domicile."

Luxembourg-domiciled funds are distributed in more than 70 markets worldwide, including Hong Kong.

Meanwhile, Luxembourg's Minister of Finance Pierre Gramegna told the Post in an exclusive interview on the sidelines of the Asian Financial Forum that the agreement is an important development for the fund industry in both markets......................

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