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:

[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).