Hong Kong: introducing a new corporate vehicle - the open-ended fund company

The Securities and Futures (Amendment) Bill 2016 was introduced in the Legislative Council last month and considered by the House Committee. The Committee decided that a Bills Committee should be formed to consider the Bill: see here (pdf). The Bills Committee will hold its first meeting tomorrow: see here. The Bill will amend the Securities and Futures Ordinance (Cap. 571) and other legislation in order to introduce a new investment vehicle in Hong Kong: the open-ended fund company. At present it is possible to form such funds in the form of a unit trust but not in corporate form because of restrictions on the reduction of capital under the Companies Ordinance (Cap. 622). The Bill contains, amongst other things, the core framework for the incorporation and governance of such companies. A copy of the Bill, together with supporting information, is available here.