Across The Border | Fund managers upbeat despite slow start to cross-border sales between China, Hong Kong

The long-awaited cross-border fund sales scheme has had a slow start but fund managers are still upbeat on its long-term prospects.

The fund arms of ICBC Credit Suisse, Hang Seng Bank and JP Morgan have recently started selling mutual funds in China and Hong Kong under the cross-border scheme that started from July last year. The scheme allows funds domiciled in mainland China and in Hong Kong to sell across the border.

With a total quota set at 600 billion yuan, split equally between fund sales in China and Hong Kong, the scheme had raised hopes of fund managers on either side of the border. But Hong Kong’s Securities and Futures Commission (SFC) and its mainland counterpart, China Securities Regulatory Commission (CSRC), took more than six months to approve the first batch of funds for cross-border sales even though they had initially promised “speedy approval” in six to eight weeks.

There has also been an imbalance in approvals on the two sides. The SFC has approved 24 mainland Chinese funds to be sold in Hong Kong while the CSRC has only cleared three Hong Kong-based funds to be sold in China.

But ICBC Credit Suisse Asset Management (International) head of international sales and client relationships Elvin Yu said that despite the slow start, he believes the scheme will grow in strength in the long term.