SFC to strengthen retail fund oversight starting November

The new measures will help protect investors.

The Securities and Futures Commission (SFC) will implement proposed measures to bolster Hong Kong’s regulatory regime for SFC-authorised retail funds starting in November.

The regulatory enhancements to the Code on Unit Trusts and Mutual Funds (UT Code), which will be gazzetted on 16 October, aim to protect investors and align the city’s regulatory framework with international standards. It will take effect on 1 November.

Specifically, SFC said the Value-at-Risk approach for retail funds’ derivative exposure management would support broader fund strategies to enrich retail product offerings.

Other measures include streamlined requirements for management company acceptability and feeder funds, which will provide managers with greater operational flexibility.

Additionally, improved safeguards for liquidity risk management and money market funds will help enhance the resilience of retail funds.

Amendments to the Code on Pooled Retirement Funds, SFC Code on MPF Products, Code on Investment-Linked Assurance Schemes, and the Code on Real Estate Investment Trusts (REIT Code) will also be implemented.