ALFI's Representative Office in Hong Kong

The progressive opening of Mainland China’s capital market and the internationalisation of the RMB offer the Luxembourg based investment funds an opportunity to further broaden their potential investor base.

Asia, where the UCITS brand in general – and Luxembourg investment funds in particular – enjoy a good reputation, is an important market for the Luxembourg fund industry. The significant growth and remarkable transformation of the Chinese economy and financial markets provide this region additional impetus:

Launched in Hong Kong in 2011 and expanded to other jurisdictions since 2013, the RQFII (RMB Qualified Foreign Institutional Investor) scheme enables offshore RMB to be reinvested into the Mainland securities market. This is all the more interesting as the Chinese equity market has grown to become the second largest equity market in the world after the US.

Since November 2014, the Shanghai-Hong Kong Stock Connect scheme permits investors with access to one market to buy and sell eligible shares listed on the other market, and a similar facility covering Shenzhen and Hong Kong is anticipated in 2016.

Luxembourg was the first country to authorise an RQFII UCITS in November 2013 as well as the first country, in December 2014, to authorise a UCITS to invest through the Shanghai Hong Kong Stock Connect. One year later, 81 Luxembourg domiciled investment funds were approved by the Luxembourg supervisory authority to use this channel to invest in China A-shares listed on the Shanghai Stock Exchange.

Since Luxembourg has been granted a 50 bn RMB RQFII quota by the People's Bank of China in April 2015, its European and global investor base is able to use the RQFII scheme directly to invest up to 50 bn RMB on the Chinese capital market. From a Luxembourg point of view, this RQFII scheme is particularly useful for fund managers who use Luxembourg as a platform for cross-border distribution.

ALFI supports the usage of this facility by providing its members a set of Frequently Asked Questions to facilitate the preparation of application files for Luxembourg investment funds and their management companies wishing to apply for an RQFII Licence and an RQFII Quota.

On the ground, ALFI’s Asia representative office set up in Hong Kong in 2010 continues to build the brand and raise the profile of the Luxembourg investment fund industry in the region. The PR work done in the region in collaboration with a specialised local communication agency (mainly seminars, roadshows and media interviews) is focussed on educating the marketplace about the benefits of a Luxembourg domicile and positioning Luxembourg as the Asian fund manager’s European domicile of choice.

ALFI Asia Representative Office Hong Kong

27/F Worldwide House

19 Des Voeux's Road

Central, Hong Kong

Phone: +852 3478-3897