Global fund firms plot mainland China push

International fund houses are looking for distribution channels on the mainland as they prepare for a new scheme that will allow them to sell funds there, according to industry players.

Capital controls now ban such fund houses from selling products on the mainland but a mutual recognition agreement to be signed between Hong Kong and the mainland in the near future would allow cross-border selling. Hong Kong-domiciled funds with fund managers licensed by the Securities and Futures Commission would be allowed to be sold on the mainland, while mainland funds would be allowed to be sold in the city.

Lieven Debruyne, chief executive of Schroders' Hong Kong office, said his firm had 12 locally domiciled retail funds that would qualify under the scheme. They cover fixed income, equity and a multi-asset offering.

"We are working together with our mainland joint venture, Bocom Schroders, to work out what products are most suitable for mainland investors," he said. "We will be ready once the details of the scheme are announced."

Debruyne said Schroders had been operating in Hong Kong and on the mainland for a long time and that would help it sell products on the mainland. The British firm was among the first overseas fund houses to operate in the city, 42 years ago, and its joint venture with Bank of Communications was set up on the mainland in 2005.

He said Schroders could sell through the joint venture, Bank of Communications and other distribution channels.