Irish UCITS gain swifter access to Hong Kong investors

The Securities and Futures Commission in Hong Kong and the Central Bank of Ireland have signed an updated memorandum of understanding simplifying and streamlining the ability to market eligible funds between the two jurisdictions via a mutual recognition framework.

A new memorandum of understanding

The enhanced mutual recognition framework (MRF) provides for a streamlined application process. Ireland joins only 10 other jurisdictions which have similarly enhanced MRFs in place with Hong Kong. The streamlined access process for Irish UCITS will be a welcome boost for managers seeking to market to Hong Kong investors.

The signing on 14 May 2025 is the latest since the Central Bank of Ireland (CBI) and the Securities and Futures Commission (SFC) originally entered a memorandum of understanding (MoU) in November 1997 providing for cooperation in relation to the supervision of cross-border investment management activity. The original memorandum of understanding opened the door for Hong Kong investment managers to be appointed to Irish regulated funds.

Key takeaways for Irish UCITS seeking access to the Hong Kong market

The process for Irish UCITS to market in Hong Kong

The process for Irish UCITS to market in Hong Kong involves firstly submitting the UCITS MRF Application Form to the CBI signed by the UCITS manager and including the relevant manager confirmation letter and bank statement from the manager. The CBI will then revert within 10 working days to confirm that the application has been forwarded to the SFC or else to request additional information.

Once the application has been submitted to the SFC by the CBI, the Irish UCITS may be processed under the SFC’s Fund Authorisation Simple Track (FASTrack) approach to receive its permission to market in Hong Kong. Under FASTrack, the SFC undertakes to complete authorisation of the Irish UCITS within 15 business days.

As a result of the streamlined process with the CBI and the SFC, it is hoped that an authorisation to market in Hong Kong for the Irish UCITS may be completed within approximately two months.

Important requirements to meet for Irish UCITS and their managers

It is worth noting that there are important requirements for Irish UCITS and their managers to meet to avail of the MRF process, including:

• Irish covered fund compliance: the Irish UCITS must meet the requirements of an "Irish covered fund" under the MRF circular, which includes being one of a general equity fund, a bond fund, a mixed fund, a feeder fund into a relevant fund, an unlisted index fund, a passively managed index-tracking ETF or a listed open-ended fund (active ETF). In addition, an Irish covered fund must not invest in crypto assets, physical commodities or certificates representing these assets; as well as not use leverage from derivatives exceeding 100% of its net asset value calculated using the commitment approach
• Manager confirmation letter: this letter is provided to the CBI from the manager on behalf of the UCITS and the manager, confirming compliance with the SFC's circular. It also requires the manager to provide a bank statement confirming the manager has a paid-up share capital and non-distributable reserves of HK$10 million or its equivalent in euro dated within two days of the CBI application being submitted
• Ongoing requirements: in addition to ensuring that the offering documents are supplemented with any local Hong Kong disclosure requirements, where required, the offering documents and investor notices must be translated into Chinese for Hong Kong investors. Constitutive documents and financial reports can be provided in English or Chinese. There are ongoing fees to be paid to the SFC (in addition to the authorisation fee). A Hong Kong representative will also need to be appointed in respect of the sale of the UCITS in Hong Kong

How Ogier can help

Ogier has chosen Ireland as its core location to service investment fund clients across the globe, leveraging the country's abundant industry expertise and established financial and regulatory infrastructure.

Our Investment Funds team at Ogier is adept at guiding clients through the complexities of marketing applications with the Central Bank of Ireland with ease. We provide comprehensive legal services for investment funds, giving clients the confidence in navigating local regulatory frameworks, to focus on selling their funds.

Our Ogier Global business recently secured a fund administration licence from the Central Bank of Ireland, enabling us to service funds domiciled in Ireland and adding to our vast investment funds services.

Please reach out to any of the team below for any guidance or assistance you may need.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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