The Securities and Futures Commission (SFC) has released its latest report on non-listed structured products for public offering sold in Hong Kong SAR during the last quarter.
The regulator has authorised 73 unlisted structured products for public offering in the city in its second quarter ended on 30 September, during which it posted an income of HK$206.1m (US$26.5m), a bounce from a loss of HK$111.1m year-on-year (YoY).
According to the regulator, there were 145 authorised unlisted structured products as at 30 September, one up from six months ago and three down from a year ago. These were issued in renminbi referring to onshore mainland investments through the RQFII, Stock Connect, Bond Connect and the China Interbank Bond Market.
In addition, the regulator gave the green lights to 40 unit trusts and mutual funds including 25 Hong Kong-domiciled funds and one investment-linked assurance scheme (ILAS) in the quarter.
In July, the SFC authorised the first two sets of leveraged and inverse products tracking the CSI 300 Index, a major benchmark for mainland equity. The first ETF under SFC’s new streamlined requirements for ETFs adopting a master-feeder structure was also given the go-ahead in July.
For the six months ended on September, Hong Kong SAR-domiciled funds reported overall net inflows of US$7.1 billion, which was primarily attributed to bond funds and index funds.
No inflow for futures and options funds, structured funds and funds which invest in derivatives was recorded. The subscription for these funds were US$25m while redemptions reached US$31m YoY when their net asset value amounted to US$80m.
A survey released by SFC in August shows that the asset and wealth management business in Hong Kong SAR posted strong growth despite the challenges facing global markets in 2019. Assets under management (AUM) increased by 20% year-on-year to HK$28.8 trillion and net fund inflows of HK$1.7 trillion were recorded during the same period.
Derivatives
The SFC has also reported that the Hong Kong Exchanges and Clearing (HKEx) launched 33 MSCI index futures contracts in July and August, which ‘expand HKEx’s derivatives product range and provide more trading and hedging tools for market participants’.
During the quarter, the watchdog approved five more MSCI index futures contracts, which were launched in September, and one MSCI index options contract proposed by HKEx.
In July, SFC issued a circular to remind licensees of updated specifications for over-the-counter (OTC) derivatives trade reporting issued by the Hong Kong Trade Repository. They include refinements to improve data quality and align with international standards.
Click here to view the Q2 report.