CSRC Optimises The Northbound Mutual Recognition Of Funds Regime

The Mutual Recognition of Funds ("MRF") regime, initially introduced in 2015, facilitates the registration of eligible funds from Hong Kong with the China Securities Regulatory Commission ("CSRC"), enabling their distribution to domestic investors in the Chinese mainland (the "Northbound MRF"), and vice versa. Over the past nine years, the MRF has provided an important channel for investors in both the Chinese mainland and Hong Kong to directly access each other's financial markets, without the need to establish a feeder fund in the host jurisdiction.

On 19 April 2024, CSRC issued five measures aiming at enhancing cooperation with Hong Kong in the financial markets, including efforts to optimise the MRF framework. On 20 December 2024, CSRC formally promulgated the Provisions on the Management of Hong Kong Mutual Recognition Funds (the "MRF Provisions"), which will come into effect on 1 January 2025. The MRF Provisions has introduced significant amendments to the