In his recent 2021-22 Budget Speech,1 the Financial Secretary (“Financial Secretary”) of the Government of the Hong Kong Special Administrative Region (“Hong Kong Government”) confirmed the intended timing for submission of a legislative proposal to allow foreign investment funds to re-domicile to Hong Kong for registration as an Open-ended Fund Company (OFC). The Financial Secretary also announced subsidies for the costs of setting up a new OFC or re-domiciling of foreign investment funds registering as an OFC in Hong Kong. The latest measures represent further important steps in ongoing enhancements and incentives to promote use of the OFC regime. We discuss the recent developments in more depth below.

In his recent 2021-22 Budget Speech,1 the Financial Secretary (“Financial Secretary”) of the Government of the Hong Kong Special Administrative Region (“Hong Kong Government”) confirmed the intended timing for submission of a legislative proposal to allow foreign investment funds to re-domicile to Hong Kong for registration as an Open-ended Fund Company (OFC). The Financial Secretary also announced subsidies for the costs of setting up a new OFC or re-domiciling of foreign investment funds registering as an OFC in Hong Kong. The latest measures represent further important steps in ongoing enhancements and incentives to promote use of the OFC regime. We discuss the recent developments in more depth below.

Starting in March, both multinational companies and asset managers that trade US futures and certain other derivatives will face new, but long-awaited, position limit rules. The US Commodity Futures Trading Commission (CFTC or “Commission”) recently amended its rules (“Final Rule”) limiting speculative positions that market participants may take in certain commodities contracts. While the US position limit regime is intended to limit speculation on commodities, the Final Rule covers derivatives commonly used by companies to manage agricultural, energy and other commodity risks. The Final Rule expands the scope of the US position limit regime to include not only specified futures but also swaps that are economically equivalent to those futures.  

Hong Kong’s Securities and Futures Commission (SFC) published a number of developments to its open-ended fund companies (OFC) regime in the last few weeks of 2020. On 23 December 2020, the SFC released both its conclusions (“Conclusions”) on the customer due diligence (CDD) requirements for OFC consultations and updated frequently asked questions (FAQ) relating to OFCs to clarify custodial requirements.

The Conclusions represent the culmination of the SFC’s further consultation on the CDD requirements to be imposed on OFCs, as released in September 2020 in its consultation conclusions related to further enhancements to the OFC regime (“September Conclusions”).1 The new CDD requirements will come into effect after a six-month transition period following the completion of the legislative process to amend the Securities and Futures Ordinance (SFO). The September Conclusions contained, amongst other things, liberalisation of the types of entities that can act as custodian and the updated FAQ provide clarification of the requirements for an OFC’s custodial arrangements. We discuss the Conclusions and updated FAQ in more depth in this Alert.

The Financial Industry Regulatory Authority (FINRA) has amended Rules 5130 and 5131, which act in combination to govern the offer and sale of new issue1 securities to certain restricted persons,2 to clarify the rules and expand exemptions from them. These amendments should benefit a broad range of market participants, including…

The Occupational Retirement Schemes (Amendment) Bill 2019 (“Amendment Bill”) was published in the Gazette on 4 April 2019. The Amendment Bill overhauls the regulatory regime of the Occupational Retirement Schemes Ordinance1 (ORSO) and prevents misuse of the occupational retirement schemes. There is no definite timeline as to the implementation of the Amendment Bill (the “Effective…