The first phase of the integrated fund platform launched on Friday provides information on more than 2,000 retail funds
Bourse operator Hong Kong Exchanges and Clearing (HKEX) has launched the first phase of an electronic platform that provides data on all retail funds in the city, continuing its efforts to diversify its business and support the government’s bid to turn the city into an international wealth management hub.
The Integrated Fund Platform (IFP) allows investors to search and access financial information and other details of more than 2,000 retail funds authorised by the Securities and Futures Commission (SFC), including those from HSBC, BlackRock, Morgan Stanley, Allianz Global Investors and Fidelity.
HKEX proposed the integrated retail fund trading platform in November last year.
“Through the IFP, we are committed to easing the development of an efficient, diverse and vibrant fund distribution ecosystem, reinforcing Hong Kong’s role as a global wealth management centre,” Glenda So, co-head of markets at HKEX, said on Friday. “By providing easier access to fund information, the fund repository will help investors make informed investment decisions and enable market participants to serve their clients more effectively.”
HKEX said in a statement that it would continue to develop the fund platform, which will include a business platform and a communications network to facilitate order routing and nominee services.
The aim is to make it easier for money managers and their sales partners to sell fund products to clients, attracting more companies into the market and creating more choice for investors, the statement added.
The platform complements other initiatives announced by the Hong Kong government since March last year to promote the city as a hub for wealth management and family offices.
Chief Executive John Lee Ka-chiu pledged in his annual policy address in October to expand the scope of tax concessions for single-family offices. In March, the government launched the Capital Investment Entrant Scheme, more commonly known as the investment migration scheme, to give fast-track residency to individuals who invest HK$30 million (US$3.9 million) or more in stocks, bonds or insurance in Hong Kong.
Christina Choi, the SFC’s executive director of investment products, said the fund repository would improve transparency, help investors make informed investment decisions and encourage retail participation in Hong Kong’s fund market.
“We believe that when other components fall into place, a fully-fledged platform will facilitate the building of an electronic ecosystem for retail fund distribution,” she said.
Market observers and industry players welcomed HKEX’s fund platform.
“Traditionally, retail banks are the major channel to sell fund products,” said Wilson Chan Fung-cheung, associate director of the MBA programme at City University. “With HKEX launching a new channel to sell retail funds, it is going to benefit the fund industry in Hong Kong and also help the wealth management sector expand further.”
Paul Pong Po-lam, the managing director of Pegasus Fund Managers, said the IFP should help attract more investors to buy fund products.
“As the next step, the HKEX should also expand the platform to include Mandatory Provident Fund products and introduce more rules to attract bond trading,” Pong said.
“HKEX could also work with mainland regulators to allow mainland pension fund products to be traded in Hong Kong. The expansion will enhance liquidity of the local markets and strengthen Hong Kong’s role as a wealth management centre.”