International investors based in Hong Kong can now use their existing setup with banking company Clearstream’s global Vestima fund processing platform to directly invest in MRF-eligible, China-domiciled funds.
The Mainland China – Hong Kong Mutual Recognition of Funds (MRF) programme allows Hong Kong and Chinese asset managers to distribute recognised funds in both jurisdictions.
Vestima acts a single point of entry for orders, streamlined cash management and consolidated position reporting in a secure environment.
The system linkage between the Hong Kong Monetary Authority’s Central Moneymarkets Unit (CMU) and Clearstream’s Vestima also supports the processing of transactions under the MRF programme for China-domiciled funds.
Philippe Seyll, Co-CEO of Clearstream Banking
Philippe Seyll, Co-CEO of Clearstream Banking, commented:
The eligibility of China-domiciled funds in Vestima is a notable step towards opening the Chinese market for investments into domestic mutual funds. This will not only encourage foreign investment in China but also supports the internationalisation of the Renminbi. As a market infrastructure provider, our key objective is to meet our customers’ increasing demands to invest in Asia and to facilitate their business in those markets.”
The Chinese asset management industry has a high growth potential: only about 3% of China’s financial assets are held in mutual funds; the remaining majority are still held in deposits. Market liberalisation, ongoing institutional demand and the shift of the retail market from saving to investing are expected to increase the percentage of assets held in mutual funds.