The number of registered open-ended fund companies in Hong Kong jumped 81 percent year-on-year to 502 as of February, the city’s financial watchdog said on Monday.
The Securities and Futures Commission noted “the overwhelming industry support” of the grant program covering eligible expenses incurred for OFC incorporation or re-domiciliation and real estate investment trust listings when paid to Hong Kong-based service providers.
A total of 430 OFCs and one REIT have already benefited from the grant program. OFCs are investment funds structured in corporate form that provide the city’s asset management industry an alternative to traditional unit trusts.
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In response to strong industry demand, the Hong Kong Special Administrative Region government announced in its 2024-25 Budget an extension of the grant program for three additional years to 2027.
The SFC said that from April 11, the program will cover 70 percent of eligible expenses paid to Hong Kong-based service providers for OFCs incorporated in or re-domiciled to Hong Kong and SFC-authorized REITs newly listed on the Hong Kong Stock Exchange (HKSE).
Caps include HK$300,000 ($38,577) for public OFCs, HK$150,000 for private OFCs, and HK$5 million for REITs, with a limit of one OFC per investment manager, according to SFC.
The SFC’s executive director of investment products, Christina Choi, said that the grant program “will continue to play an important role in sustaining the momentum and interest in setting up new OFCs and REITs in Hong Kong, thereby enhancing its status as a leading asset management hub”.
On the same day, CMS Asset Management (HK) Co, a wholly owned subsidiary of China Merchants Securities International Co, announced the listing of its CMS Hang Seng Tech Index ETF on the Hong Kong Stock Exchange.
The ETF, which tracks the Hang Seng Tech Index to help investors capture growth opportunities in the country’s frontier technology sectors, will debut with an initial price of HK$10 per share, trading in board lots of 10 shares with a minimum investment of HK$100 and a management fee of 0.7 percent for listed shares.
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“The launch of the ETF aims to help investors seize investment opportunities in China’s technology sector and share in the growth dividends of these innovative enterprises through a low-cost, efficient approach to investing in China’s top technology companies,” said Liu Bo, vice-president of China Merchants Securities International Co.
Zhou Geng, CMS Asset Management (HK) Co’s managing director, said that the company is considering launching ETFs related to artificial intelligence (AI) and robotics technologies in the second half of the year.
He added that the company is also exploring the possibility of introducing ETFs linked to Japanese or Southeast Asian equity markets.
Contact the writer at tianyuanzhang@chinadailyhk.com
