Draft Bill On Open-Ended Fund Companies Gazetted

Introduction

Following public consultation in March 2014, the Financial Services and the Treasury Bureau (FSTB) has now published the "Consultation Conclusions on Open-ended Fund Companies", and the related Securities and Futures (Amendment) Bill 2016 (Amendment Bill) was gazetted on 15 January 2016.

Currently, an open-ended investment fund may only be established in Hong Kong in the form of a unit trust but not in corporate form (mainly due to various restrictions on capital reduction under the Companies Ordinance (Cap. 622) (CO)). Pursuant to the Amendment Bill, there will be a choice to allow such fund be set out in the form of a company. It is hoped that with the extra option for fund structure, more funds (whether public or private) will choose to domicile in Hong Kong, which will in turn deepen and broaden Hong Kong's asset management industry.