SFC Retail Fund Rules Ease Constraints, Strengthen Investor Safeguards

Changes to Hong Kong’s retail fund rules will give managers greater flexibility while strengthening investor safeguards, the Securities and Futures Commission (SFC) said.

Enhancements to the Code on Unit Trusts and Mutual Funds are due in November to improve the competitiveness of the city’s retail fund market.

They include a Value-at-Risk approach to managing derivative exposure, enabling broader investment strategies and product offerings.

The SFC will also streamline requirements for management company acceptability and feeder funds, increasing operational flexibility.

Stronger safeguards for liquidity risk management and money market funds are intended to improve retail fund resilience amid changing market conditions.

Elisa Ng, the SFC’s executive director of investment products, said the measures would strengthen investor protection.