Exclusive | Hong Kong may bypass banks to sell investment funds through stock exchange and smartphones

Investors in Hong Kong might soon be able to trade fund products through Hong Kong Exchanges and Clearing as well as their smartphones, as the Hong Kong Investment Funds Association pushes for more sales channels for retail funds, according to its chairman, Graham Turl.

“We are working closely with the Securities and Futures Commission to encourage more alternative sales channels for retail fund products in Hong Kong,” Turl said in an interview with the South China Morning Post.

At present, more than 80 per cent of fund sales in Hong Kong are conducted through banks, while the rest are sold through fund houses directly to clients. But Turl wants to see an expansion in the number of sales channels to boost fund sales, which had a strong year in 2017.

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Gross fund sales in the first eleven months of 2017 reached US$69.9 billion, bypassing the US$65.9 billion for 2016 as a whole, thanks to a strong performance by the benchmark Hang Seng Index, which rose by 36 per cent in 2017, its best showing since a 52 per cent rise in 2009.

Turl, who is also managing director and general counsel for Asia-Pacific at BlackRock, the world’s largest asset manager, believes an expansion in sales channels will boost sales further.

A spokeswoman confirmed that HKEX was working towards this goal. “HKEX will commence a phased replacement of its system for securities clearing and settlement, and plans to include within the blueprint for its new post-trade processing system capabilities that would support participants of HKSCC, its securities clearing house, in mutual fund-related trade and position handling,” she told the Post.

“Function roll-outs will depend on whether there are material business opportunities,” she added.