Published by Fund Selector Asia – 8th Nov 2018
In 2018, various firms have submitted eight applications to China’s securities regulator to sell their funds in the mainland.
The China Securities Regulatory Commission (CSRC) received Amundi’s application for its Disruptive Opportunities Equity Fund to be included under the Hong Kong-China Mutual Recognition of Funds (MRF) scheme, according to the regulator’s records.
If approved, the product, which was launched in Hong Kong in December 2016, would be the third MRF fund that Amundi offers for sale in China.
The other two products are the New Generation Asia Pacific Equity Dividend Fund and the Growth Fund, which is a global equity fund. The firm submitted MRF applications for both funds in 2015, but it was only two years later that the products received a greenlight from the regulator, according to CSRC records.
Most firms, such as BEA Union Investment, Bank of China Hong Kong and Hang Seng Investment Management, had to wait nearly three years for product approval.
Amundi’s key distributors in the mainland for its MRF funds are HSBC (China) and Ant Financial, Zhong Xiaofeng, the firm’s CEO for North Asia, said previously.
The firm has not followed rivals such as Blackrock and JP Morgan AM, who have established a wholly foreign-owned subsidiary in China.
“If we were to set up a WFOE, which we are considering, the WFOE will be serving the joint venture and our partners. We are not creating a separate fund management house,” Zhong said.
The French firm established a joint venture, ABC-CA Fund Management, with the Agricultural Bank of China in 2007, in which Amundi has a 33.3% stake.
More applications
Eight applications for Hong Kong-domiciled funds (northbound products) have been submitted this year for MRF distribution in China. These include products managed by JP Morgan Asset Management, Haitong International Asset Management, Taikang Asset Management, Value Partners and Bosera Asset Management, according to CSRC records.
In total, 12 funds are now waiting for approval from the regulator. Only 10 Hong Kong-domiciled funds have been approved for sale in China through the MRF programme, with HSBC Global AM’s MRF fund to be the latest to receive the greenlight from the regulator.
However, the fresh applications come at a time when northbound funds have seen nine consecutive months of net outflows, according to records from China’s State Administration of Foreign Exchange.
Year-to-date ending in September, total net outflows from northbound funds amounted to RMB 3.4bn ($490m).
Amundi remains positive, however.
“We are positive on the long-term demand for the northbound funds, as mainland Chinese investors continue to seek diversification via offshore investments,” a spokeswoman for the firm said, without elaborating.
