The Hong Kong Securities and Futures Commission and Securities Commission Malaysia have signed a memorandum of understanding that broadens their cross-border regulatory framework for funds and equity listings. The agreement expands the Hong Kong-Malaysia mutual recognition of funds regime beyond the 2009 arrangement for Islamic funds and sets up a simplified framework for dual initial public offering listings between the two markets. In parallel, The Stock Exchange of Hong Kong Limited has added Bursa Malaysia Securities Berhad to its list of Recognised Stock Exchanges to support equity cross-listings. The expanded mutual recognition regime now covers non-Islamic exchange traded funds, leveraged and inverse products, and real estate investment trusts. Under the framework, eligible Hong Kong and Malaysian funds can use streamlined authorisation, recognition or approval processes, while remaining subject to home-jurisdiction supervision and host-jurisdiction distribution and disclosure rules. The Securities and Futures Commission issued two circulars with the Hong Kong-side requirements, including conditions for Malaysian funds and Malaysian real estate investment trusts seeking public offering in Hong Kong. For Malaysian real estate investment trusts seeking authorisation in Hong Kong by way of a secondary listing, the circular sets eligibility thresholds including at least HKD 3 billion market capitalisation, at least five full financial years of good regulatory compliance on Bursa Malaysia, at least 300 unitholders and at least HKD 125 million public float. The memorandum took effect on signature and replaces the 2009 declaration. The two regulators said they will jointly develop a workflow to facilitate dual listings, including the use of a single set of documents for simultaneous home and host market listings, and will periodically review whether the framework should be further enhanced.

Original source Back to tracker