The Hong Kong Securities and Futures Commission (SFC) is aiming to diversify fund distribution channels, which have been for years dominated by the banking sector, Ashley Alder, chief executive of the watchdog, said in a speech during the HKSI Institute Roundtable Luncheon this week.
“This has limited investor choice and raised trailer fees and other distribution costs. New fund distribution platforms can multiply distribution channels, lower costs and encourage competition.”
Alder noted that the regulator has issued specific guidance on automated or robo-advice and how suitability assessments can be applied in the online environment. However, he said that the SFC also wants to look at how other utilities can be designed to connect more distributors and fund houses across the market, including the mainland.
Also on the agenda
The SFC is now in discussions with Chinese regulators about cross-listing of ETFs between Hong Kong and the mainland, as well as including ETFs in the Stock Connect, Alder said.
Another area is the management of financial risk for international investors with exposure to the mainland markets and for mainland investors with exposure in Hong Kong and global markets.
“It means enabling international access to mainland-related futures and options, as well as the development of mainland-related equity, currency and fixed income derivatives, which mainland and global investors can access in Hong Kong.
“In my view, the market potential for the trading of risk management products in or through Hong Kong is enormous.
“The overarching theme is that Hong Kong can enhance its current position to move up the value chain as it plays an even more important role to enable mainland savers to access the world and international investors to access China.”
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