SFC proposes amendments to the Code on Unit Trusts and Mutual Funds

Hong Kong SFC

The Hong Kong Securities and Futures Commission (SFC) informed that it has today launched a three-month consultation on proposed amendments to the Code on Unit Trusts and Mutual Funds (UT Code) to update the regulatory regime for SFC-authorized funds and address risks posed by financial innovation and fast-moving market developments.

Key proposals include strengthening requirements for key operators (management companies, trustees and custodians), providing greater flexibility and enhanced safeguards for funds’ investment activities (particularly in relation to derivatives, securities lending, and repo and reverse repo transactions), and introducing new fund types (including active ETFs). The proposals are made in view of international regulatory and local market developments.

An important part of the SFC’s strategy to strengthen Hong Kong as an international, full-service asset management centre is to ensure that the regulations governing public funds remain robust and aligned with international standards,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “These updates to the UT Code will provide a foundation for further growth in our retail fund industry.

Consequential amendments are also proposed to relevant provisions of the SFC Code on MPF Products, the Code on Pooled Retirement Funds and the Code on Investment-Linked Assurance Schemes.

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