Retail Investment Funds in Hong Kong

Registering a RIF in HKSAR requires indepth understanding of the regulatory framework in this jurisdiction. Operation of RIFs is regulated by the OFC Code, while more specific rules & regulations are laid forth in the OFC rules. Individuals seeking to get an investment license in HKSAR should keep in mind that they can do so from other jurisdictions.

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Licensing of RIFs in HKSAR

Individuals seeking to open a RIF in HKSAR are required to apply for permission with the SFC. 

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The marketing of RIFs (open-ended & closed-ended ones) must be done in accordance with specific regulatory framework. Hence, only holders of an SFC license that authorizes operations with Type 1 securities can engage in it. When offering any of their fund’s products, licensed individuals must additionally meet other requirements contained in the OFC Code.

RIF managers are required to abide by the rules & regulations contained in the UT Code. In particular, they are expected to:

• focus primarily on managing their funds
• have sufficient funds (not less than ten million H.K. dollars)

It is expected that management companies must have at least 2 employees, each of whom should have a 5-year experience working with government funds. Managing assets requires obtaining a license authorizing asset management in HKSAR.

SFC-approved retailers are exempted from paying income tax in HKSAR. Investors aren’t taxed on dividends or capital gains, either.

Only specially appointed trustees or custodians, i.e. banking establishments or trusts based outside HKSAR & endorsed by the SFC, are allowed to hold an RIF’s assets . 

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Managing RIFs in HKSAR

As soon as a RIF is endorsed by the SFC, it must comply with the regulator’s reporting requirements. Essential information on a RIF needs to be updated once a year.

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Changes in RIFs needn’t be approved by the SFC. Individuals interested in putting money in such funds must be notified of the changes asap so they could adjust their plans accordingly. No approval is needed for updating & reissuing a document containing proposed changes, providing its format & content matches the previously approved version. The document must be submitted to the SFC no later than 7 days from the date of issue.

RIFs must publish 2 financial statements per year & submit them to the SFC.