On 15 May 2019, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) and the Securities and Futures Commission of Hong Kong (the SFC) entered into a Memorandum of Understanding on Mutual Recognition of Funds (the MoU).

The MoU will allow eligible Dutch Undertakings for Collective Investment in Transferable Securities (UCITS) and Hong Kong Collective Investment Schemes (CIS) to be distributed in each other’s market through a streamlined process. The MoU establishes a framework for exchange of information, regular dialogue as well as regulatory cooperation in relation to the cross-border offering of eligible Dutch UCITS and Hong Kong CIS. According to the MoU, its purpose is to enhance cooperation between the AFM and the SFC in relation to:

  1. CIS and UCITS offered, marketed and distributed to the public in the Netherlands and/or Hong Kong on a cross-border basis;
  2. authorised management companies of CIS and UCITS, based in either Hong Kong or the Netherlands.

Based on their common understanding of their regulatory and supervisory frameworks concerning their respective management companies and collective investment schemes, the SFC and the AFM have agreed to promote reciprocal market access for fund providers by facilitating cross-border offering, marketing and distribution of certain funds between their jurisdictions subject to the requirements set out in the MoU.

According to the AFM, the MoU constitutes an important stepping stone for the Dutch asset management industry seeking to develop activities in Asia. The MoU should enable industry players in the Netherlands and Hong Kong to operate in a clear and robust supervisory framework and ensure proper protection for investors.

View the MoU, 15 May 2019.

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Photo of Nikolai de Koning (NL) Nikolai de Koning (NL)

Nikolai de Koning is a financial services lawyer (advocaat) based in Amsterdam. Nikolai is experienced in financial services and banking law, as well as in data privacy (protection). He is experienced in advising on regulatory and compliance aspects relevant to financial institutions, such as insurance companies, investment firms, clearing institutions and central counterparties. Nikolai also advises on Dutch licence and notification requirements and he assists companies in their licence or notification processes with the Dutch financial regulators. He also specialises in privacy issues arising out of online products, data protection and e-commerce.