The deal will help improve the distribution of eligible Hong Kong public funds and Luxembourg Ucits funds in each market.
Ucits (or undertakings for collective investment in transferable securities) are a regulatory framework in Europe for the management and sale of mutual funds.
Ashley Alder, the SFC’s chief executive, said: “The new cooperation framework expands our MRF network following mainland China, Switzerland, France and the UK.
“It further strengthens our ties and regulatory cooperation with Luxembourg, a major hub for fund domicile.”
The MoU will allow exchange of information, regular dialogue as well as regulatory cooperation in relation to the cross-border offering of eligible Hong Kong public funds and Luxembourg Ucits funds.
Luxembourg-domiciled funds are distributed in more than 70 markets worldwide, including Hong Kong.
There are 1,037 retail mutual funds sold in Hong Kong that are domiciled in Luxembourg, representing 47% of 2,185 SFC-authorised mutual funds as of September, according to SFC data.
Claude Marx, the director general of the CSSF, said: “Hong Kong and Luxembourg have a long history of cooperation in the area of mutual fund distribution.
“The new memorandum of understanding is an important step for the mutual recognition of investments funds in our respective jurisdictions and demonstrates the excellent cooperation between our two supervisory authorities.”