Hong Kong Open-ended Fund Company Comes into Effect

Pursuant to the Gazette published on 27 July 2018, the Securities and Futures (Amendment) Ordinance 2016 enacted to amend the Securities and Futures Ordinance (SFO) comes into effect on 30 July 2018, along with subsidiary legislations[1] issued in May 2018 including the Securities and Futures (Open-ended Fund Companies) Rules (OFC Rules), and also the non-statutory Code on Open-ended Fund Companies (OFC Code) promulgated by the Securities and Futures Commission (SFC) along with its consultation conclusions on the OFC Rules.

The legal framework has now been finally and fully put in place to offer the open-ended fund company (OFC) as an alternative fund vehicle for Hong Kong domiciled funds, with the policy objective to bolster Hong Kong as a full-service asset management hub.

In this legal update, we set out our take on the new available fund vehicle and its likely impact on the funds market, together with an overview of the key requirements:

HongKong OFCs Download

[1] (i) the Securities and Futures (Amendment) Ordinance 2016 (Commencement) Notice (the Commencement Notice); (ii) the Securities and Futures (Open-ended Fund Companies) Rules (the OFC Rules); and (iii) the Securities and Futures (Open-ended Fund Companies) (Fees) Regulation (the Fees Regulation).

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For a deeper perspective on Vivien Teu’s journey and earlier contributions, visit the archived website of Vivien Teu & Co LLP at archive.vteu.co. The archive captures the firm’s foundations in corporate and commercial law, with a strong focus on asset management, funds, and financial services in Hong Kong and Greater China. Today, Vivien Teu Law Practice leads with impact focus, with its emphasis and dedication on sustainable finance, ESG integration, impact investing, social finance and philanthropy, reflecting a continued commitment to aligning law and purpose.

Vivien Teu is Founder & Principal of Vivien Teu Law Practice / VTLP Impact. With more than 25 years in-depth experiences in capital markets, financial institutions and asset management industry, financial services, financial and securities regulatory matters, funds formation, investment and finance transactions, Vivien is market leading in her focus on ESG legal and regulatory issues, increasingly integrated into her advisory and transactional practice. She has been active in impact ecosystem building, contributing to standard setting and industry engagements on sustainability, ESG and impact issues and sustainable finance, specifically in the investment and capital markets, holistically covering regulatory, legal and policy perspectives, and advises across the spectrum of capital, ESG issues and asset classes, public and private markets, for-profit, non-profit organisations or hybrid structures, and range of fund structures and financing instruments.

Prior to establishing Vivien Teu Law Practice / VTLP Impact, Vivien has solid industry experience from strategic roles throughout her career, including senior in-house legal experience with global asset management firm, Invesco, and practised with leading international funds and regulatory practice including magic circle law firm Clifford Chance, and most recently with global law firm Dentons, where Vivien assumed key roles as sustainable finance lead on the Global ESG Steering Committee, Global Funds Leaders Group and Global Financial Institutions Practice Group, driving impact focus within mainstream finance and capital markets. Vivien’s leadership in sustainable finance, global funds and industry engagement is matched with her commitment to community and ecosystem building.

With the vision of the role of law in purposeful partnerships and projects, to align capital with sustainability and increasing focus on measurable positive environmental and social outcomes, Vivien’s experiences include advising asset owners, asset managers and also charitable foundations in establishing purpose-led initiatives, related stewardship and governance considerations and structure design, B Lab’s legal requirements and certification standards for B Corps, green and sustainable finance frameworks and instruments, legal issues of carbon markets and climate transition, climate mitigation and adaptation strategies and funds, nature-based solutions and finance, impact term-sheets and other innovative finance instruments for impact, advocacy efforts as well as engaging in market proposals for policy, legal and regulatory levers for advancing sustainability and impact.

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