Tài liệu HIGHLIGHTS OF THE AUTHORISATION REQUIREMENTS FOR FUND DISTRIBUTION IN HONG KONG doc

Regulatory Framework• Under the Hong Kong regulatory regime, collective investment schemes which are marketed or distributed to the Hong Kong public, are subject to the authorisation of

Highlights of the Authorisation

Requirements for Fund

Distribution in Hong Kong

Updated as of January 2012

www.pwc.com

Table of Content

1 Regulatory Framework

2 Authorisation Process

3 Hong Kong Offering Document

4 Considerations for Overseas Schemes

5 Fees for Authorisation

1 Regulatory Framework

• Under the Hong Kong regulatory regime, collective investment

schemes which are marketed or distributed to the Hong Kong public, are subject to the authorisation of the Securities and Futures

Commission (the “SFC”)

1 Regulatory Framework

• The major laws and regulations governing the authorisation of

collective investment schemes in Hong Kong are:

a) Securities and Futures Ordinance (“SFO”)1; and

b) SFC Handbook for Unit Trusts and Mutual Funds,

Investment-Linked Assurance Schemes and Unlisted Structured Investment Products ("Handbook") 2

[1] For specific types of investment schemes, additional regulations may apply.

[2] Section 1 of the Handbook sets out the overarching principles and requirements that apply across different types of products governed by the Handbook, whilst Section 2 of the Handbook (i.e Code on Unit Trusts and Mutual Funds (the "Code")) stipulates the specific requirements on unit trusts and mutual funds.

2 Authorisation Process

• A collective investment scheme applying for an SFC authorisation for public distribution in Hong Kong is required to submit a duly

completed application form and checklist (prescribed by the SFC) together with various constitutive documents

2 Authorisation Process

• Set out below are some of the submission requirements (not

exhaustive):

 The scheme's offering and constitutive documents, including its Hong Kong

offering document and Product Key Facts Statement ("Product KFS")

 The scheme's latest audited report (if any) and if more recent, the latest unaudited report;

 Information of the scheme's management company demonstrating its fit and

propriety;

 The trustee/custodian's latest audited report (if any);

 A consent letter of appointment from the trustee/custodian (not required for

schemes in recognized jurisdictions or already in existence);

 A letter nominating an individual to be an Approved Person of the scheme,

containing the individual's details;

 The Hong Kong Representative related undertakings (where applicable); and

 Documentary evidence of the scheme's authorization status in its local jurisdiction.

3 Hong Kong Offering Document

• The Hong Kong Offering Document of a scheme should contain,

inter alia, the following information:

 Constitution of the scheme (e.g the name, registered address, place and date of creation of the scheme, an indication of the scheme's duration if limited.);

 Investment objectives and restrictions;

 Collateral policy and criteria (e.g selection criteria, nature and policy of the

collateral held by the scheme, description of the holdings of collateral), where

appropriate;

 Operators and principals (e.g the name and registered address of the directors, trustee, custodian, auditors and registrar etc.)

 Characteristics of units or shares;

 Application and redemption procedures;

3 Hong Kong Offering Document

• The Hong Kong Offering Document of a scheme should contain, inter alia, the following information: (Continued)

 Distribution policy;

 Fees and charges;

 Taxation;

 Reports and accounts;

 Warning statements;

 Circumstances leading to the termination of the scheme;

 Other information which is necessary for investors to make an informed judgement.

4 Considerations for Overseas Schemes

Place of Establishment of the Scheme

• It is recognised by the SFC that some overseas schemes already

comply with certain provisions of the Handbook by virtue of prior authorization in a regulated jurisdiction Applications for

authorization of “recognized jurisdiction” schemes will generally be reviewed on the basis that the scheme's structural and operational requirements, and core investment restrictions, already comply in substance with the local requirements

• However, the SFC expects a scheme to comply in all material respects with the local requirements and reserves the right to require such

compliance as a condition of authorization

4 Considerations for Overseas Schemes

Management Company

• The investment management operations of a fund management

company or those of the investment adviser (where the latter has

been delegated the investment management function) are required to

be based in a jurisdiction with an inspection regime acceptable to the SFC A list of acceptable inspection regimes is published on the SFC’s website

• It should be noted that the SFC will consider other jurisdictions on

their merits and may accept an undertaking from the management company that the books and records in relation to its management of

a scheme will be made available for inspection by the SFC on request

4 Considerations for Overseas Schemes

Hong Kong Representative

• If the management company of a scheme is not incorporated and

does not have a place of business in Hong Kong, the scheme will be required to appoint a Representative in Hong Kong to perform

certain functions such as handling subscription and redemption

requests, accepting notices or correspondence served by the investors

on the scheme etc The Representative must:

a) be licensed or registered under the SFO; or

b) be a trust company registered under Part VIII of the Trustee

Ordinance (Chapter 29 of the laws of Hong Kong) and such

company is an affiliate of an authorized financial institution

5 Fees for Authorisation

• A scheme is required to pay an application fee according to the table below Upon the granting of authorisation, it will also be required to pay an one-off authorisation fee and an annual fee on an ongoing

basis

Single Fund Umbrella Fund Subfund

Application Fee (HK$) 20,000 40,000 5,000

Authorization Fee (HK$) 10,000 20,000 2,500

Annual Fee (HK$) 6,000 7,500 4,500

This publication has been prepared for general guidance on matters of interest only, and does

not constitute professional advice You should not act upon the information contained in this

publication without obtaining specific professional advice No representation or warranty

(express or implied) is given as to the accuracy or completeness of the information contained

Contact

For more information about our services, please feel free to contact the following person

or your usual PwC contacts:

Adams Chan

Partner, Regulatory Advisory Services

: +852 2289 2784

: adams.wf.chan@hk.pwc.com