The China Securities Regulatory Commission (CSRC) has announced a set of measures aimed at enhancing Hong Kong's status as an international financial hub. According to Odaily, on April 19, 2024, the CSRC unveiled five initiatives to strengthen capital market collaboration with Hong Kong, with the goal of solidifying its position as a leading global financial center.

One significant development is the revision of the 'Interim Provisions on Hong Kong Mutual Recognition Fund Management' (CSRC Announcement [2015] No. 12) in order to further enhance the mutual recognition framework for funds between mainland China and Hong Kong. The CSRC is currently seeking public feedback on the 'Regulations on Hong Kong Mutual Recognition Fund Management (Draft for Soliciting Opinions)'.

Since the introduction of the mutual recognition mechanism for funds between mainland China and Hong Kong in July 2015, progress in mutual recognition initiatives has been consistent and systematic. All operational systems and mechanisms are functioning effectively, catering to the cross-border financial management requirements of investors in both regions and providing robust support for Hong Kong's development as an international financial hub.

To maximize the benefits of the mutual recognition mechanism for funds between the two regions, the proposed rule revision aims to optimize operations from two key perspectives. Firstly, the sales ratio limit for mutual recognition funds in the host region will be increased from 50% to 80%. Secondly, it will permit the transfer of investment management responsibilities for Hong Kong mutual recognition funds to overseas asset management entities within the same group as the fund manager.

The CSRC is eager to receive valuable feedback from various stakeholders and is committed to further refining and enhancing the regulations based on public input before their implementation.