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Hong Kong Develops Its Fund Management Business

Friday, July 20, 2012

The annual Fund Management Activities Survey (FMAS) released by the Securities and Futures Commission (SFC) shows that despite a 10.4% aggregate decline in 2011, Hong Kong’s combined fund management business continued to achieve a number of milestones in expanding the range of renminbi investment products.

The survey of fund management business covered the overall value of assets reported in the sub-sectors of asset management, fund advisory and private banking, as well as SFC-authorized real estate investment trusts (REITs). It totalled just over HKD9 trillion (USD1.16 trillion) in 2011, as against the record figure of almost HKD10.1 trillion reached in 2010.

The latest survey indicates that Hong Kong remained a preferred platform for international investors investing in the region. Overseas investors have consistently contributed over 60% (or HKD5.64 trillion) of the total fund management business, excluding REITs. This proportion has remained steady over the past five years.

“The local fund management industry continued to develop despite challenges stemming from the global economic environment in 2011,” said Alexa Lam, the SFC’s Deputy Chief Executive Officer and Executive Director of Policy, China and Investment Products. “The SFC will keep in view developments in the financial markets and where necessary, additional safeguard measures may be considered given the uncertain global economic outlook and the continuing European debt crisis.”

Licensed asset management and fund advisory houses continued to contribute the largest proportion of the combined asset management business. Their aggregate asset management and fund advisory businesses amounted to HKD6.2 trillion at the end of 2011, down 15.1% from end-2010.

Registered financial institutions recorded a 0.04% decrease in their aggregate asset management and other private banking business to HKD2.4 trillion at end-2011, while insurance companies reported assets under management of HKD287bn at the end of 2011.

Some other highlights of the survey include the information that non-REIT asset management business decreased by 15.8% to HKD5.76 trillion last year, of which HKD3.85 trillion worth of assets were managed in Hong Kong and 77.9% were invested in Asia; and that the market capitalization of SFC-authorized REITs recorded a growth of approximately 20.4% to HKD124bn.

The FMAS report notes that the SFC has continued to monitor closely regulatory compliance of investment products. Following the rollout of the enhanced regulatory regime, the SFC also gave the industry guidance on the quality of disclosures based on findings of the surveillance exercise on retail offering documents. Furthermore, the SFC strengthened its partnership with the Mainland and fortified its role in the process of RMB internationalization by expanding the range of RMB products.

“The SFC will continue to maintain close dialogues with the Hong Kong government, the Mainland regulatory authorities and other relevant regulators to further promote the development of offshore RMB investment products in Hong Kong with a view to anchoring Hong Kong’s role as an offshore RMB centre,” Lam added.

The FMAS has been conducted annually since 1999 to help the SFC assess the industry’s state of affairs for policy setting and operations planning. This year, a total of 409 entities responded to the survey on a voluntary basis. They included 351 licensed asset management and fund advisory houses, 39 registered financial institutions and 19 insurance companies.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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