HKEX developing integrated platform for Hong Kong’s retail fund distribution

Rick Steves

HKEX is in the process of developing an integrated fund platform aimed at enriching the distribution of retail funds in Hong Kong, reinforcing the region’s stature as a pivotal wealth management hub on both regional and global fronts.

Hong Kong Exchanges and Clearing Limited (HKEX) has taken a significant step towards bolstering Hong Kong’s position as a regional and global wealth management center by announcing the development of an integrated fund platform.

This platform is tailored for the distribution of retail funds, with an eye on amplifying Hong Kong’s continued pivotal role in the wealth management domain. The platform is currently under development and is envisaged to encapsulate the entire distribution cycle and value chain pertinent to retail funds in Hong Kong.

This initiative is aimed at diminishing the entry barriers to the industry, thereby facilitating market participants in distributing fund products to their clientele more efficiently.

Cost-effective access to a diverse array of fund products

Glenda So, HKEX Group Head of Emerging Business and FIC, underscored HKEX’s commitment towards this project, stating, “At HKEX, we are committed to further building the attractiveness and competitiveness of Hong Kong as an IFC.” The overarching goal is to provide investors with cost-effective access to a diverse array of fund products, courtesy of a wider spectrum of distributors. This development is perceived as a substantial move in bridging capital with opportunities, resonating with HKEX’s ethos of fostering a more diversified market along with an enriched palette of choices for investors.

Initially, the fund platform is poised to operate on a business-to-business service model, comprising three core components: a Communication Hub, a Business Platform, and an Information Portal.

The Communication Hub is conceived as a centralized network connecting various stakeholders in the fund distribution ecosystem, such as fund managers and distributors, to smoothen transactions. On the other hand, the Business Platform will encompass functionalities like fund order routing, subscriptions and redemptions, payments and settlements, along with an array of optional nominee services. Lastly, the Information Portal is aimed at enhancing transparency and providing the investing public with an avenue to access a plethora of information on fund investment options.

The operating model and structure of the fund platform are currently under evaluation by HKEX. In collaboration with the Hong Kong Government, the Securities and Futures Commission, and other key stakeholders, HKEX is diligently working to finalize the design and development framework of the platform in the upcoming months. This meticulous approach reflects a harmonized effort in ensuring that the platform is well-aligned with the needs and expectations of the market participants, thereby promising a potential positive impact on the retail fund distribution landscape in Hong Kong.

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