PRC domestic fund management companies may now establish operations in Hong Kong

摘要

Purpose – The purpose of this paper is to explain the Rules on the Establishment of Operations in Hong Kong by Securities Investment Fund Management Companies, issued pursuant to Supplement 4 to the Closer Economic Partnership Arrangement, under which PRC domestic fund management companies specifically approved by the China Securities Regulatory Commission may establish subsidiaries in Hong Kong to operate relevant businesses. Design/methodology/approach – The paper explains some of the key provisions of the rules relating to the establishment of HK operations, outlines continuing obligations of fund management companies after they have established HK operations, and discusses applicability of the rules to equity participations and the formation of establishments in other jurisdictions. Findings – In 2007 several fund management companies, approved by the CSRC as qualified domestic institutional investors' issued fund products for overseas investment. Many in the domestic fund management industry hope to set up Hong Kong operations to further their overseas investment initiatives. Practical implications – The rules are a significant first step in allowing domestic fund management companies to create global investment management platforms outside the PRC. Originality/value – The paper offers practical guidance by experienced securities lawyers.