This week, the Hong Kong Securities and Futures Commission decided that effective Aug. 1, mutual fund advertisements will no longer need to be pre-approved.
The proposal change was first raised in January, and pending several months of consideration and communication with various mutual fund companies, the SFC decided that mutual fund advertisements could simply be released. Upon publication, however, ads are still subject to SFC monitoring in order to ensure accuracy and consumer safety.
Currently, companies can wait anywhere from two days to two weeks when they seek out SFC approval. Last year, the SFC approved 8,200 mutual fund advertisements, up from 6,600 in the previous year.
This streamlined approach will create efficiency for the fast-growing fund industry in Hong Kong, said Alexa Lam, SFC deputy chief executive and executive director of policy, China and investment products.
The rule change will not apply to pension funds or to insurance-oriented investment products.
In addition, mutual fund companies will still need to gain SFC approval regarding any new funds that are launched, funds that merges, or funds that are terminated.