On Friday, the Securities and Futures Commission (SFC) announced it would launch the scheme to fast-track the approval process for mandatory provident funds (MPF) and pooled retirement fund (PRF) products
Under the revamped process, new fund applications will be split into two streams: standard applications and non-standard applications.
By doing this, the SFC hopes to reduce the overall processing time without compromising investor protection.
Fast-tracked
Standard applications will be fast-tracked, so that SFC authorisation – if granted – will be given on average between one to two months from the acceptance date of the application.
"An authorisation process that is more efficient can meet the fund providers’ wish to reduce the ‘time to market’ of their funds for public offering"
Non-standard applications will also be processed under an enhanced regime, being given a two to three month window to be processed by the SFC.
“An authorisation process that is more efficient and focuses more on key risks can meet the fund providers’ wish to reduce the ‘time to market’ of their funds for public offering,” said the SFC’s executive director of investment products, Julia Leung.
“To achieve this, we need applicants to provide proper and quality submissions at the time of application and throughout the application process in a timely manner.”
The initiative will be implemented on 9 November for a six-month trial period, before being refined and adopted as policy.
Understanding the market
The Hong Kong Investment Funds Association HKIFA has been in discussion with the SFC over recent years, gathering company views on how to streamline the fund approval process.
HKIFA chairman Terry Pan said: “We applaud the SFC for their efforts and commitments to listen to the industry, to understand the market needs and to work out solutions.
“We are in full support of this initiative as we believe that this will greatly enhance the competitiveness of Hong Kong as a fund management centre.
“More importantly, it will be in the interests of investors as it means a shorter time-to market and that products can be rolled out more readily to enable investors to capitalize on the investment opportunities.”
Responsibility
Pan said the industry will play a key role in the running of the new regime as more responsibility will be vested with the fund managers in the approval process.
“In the coming months, we will work closely with the industry to ensure the smooth and successful implementation of this new regime.”
