Launch of CMU Fund Order Routing and Settlement Service for Mainland-Hong Kong Mutual Recognition of Funds

The Hong Kong Monetary Authority (HKMA) today (Thursday) announced the launch of a new cross border linkage with the Mainland by the Central Moneymarkets Unit Fund Order Routing and Settlement Service (CMU Service) to provide order routing and settlement support to the Mainland-Hong Kong Mutual Recognition of Funds (MRF) initiative.  The new CMU linkage will commence operation when there is cross border buying and selling of funds.

The Securities and Futures Commission and the China Securities Regulatory Commission signed a Memorandum of Regulatory Cooperation on 22 May 2015 to provide a framework for the MRF initiative to allow eligible Mainland and Hong Kong funds to be distributed in each other’s market through a streamlined vetting process.  The MRF initiative was implemented on 1 July 2015.

Leveraging on the existing financial infrastructure in Hong Kong and on the Mainland, the HKMA, the China Securities Depository and Clearing Corporation Limited and the Shenzhen Stock Exchange jointly developed infrastructure and network linkages to facilitate processing of cross-border investment fund transactions under the MRF arrangement.  Riding on such system linkages, the CMU Service will enable investment fund distributors, transfer agents and fund houses in Hong Kong to process MRF-related investment fund subscription, redemption and switching orders as well as the resultant cash settlement with their Mainland counterparts in an automated and efficient manner.  Similarly, Mainland investment fund distributors, transfer agents and fund houses are able to, through the linkages between the Mainland fund processing platform and the CMU Service, process MRF investment funds orders and transactions with their Hong Kong counterparts automatically, effectively and efficiently.  

Mr Peter Pang, Deputy Chief Executive of the HKMA said, “The new CMU cross border linkage with the Mainland is a major financial infrastructure for the investment fund industry in Hong Kong.  The enhanced CMU Service will help contribute to the efficient and effective implementation of the MRF arrangement and lay a foundation for the continued development of the MRF initiative. This will in turn enhance Hong Kong’s role as a leading asset management centre in the region.”

Hong Kong Monetary Authority
9 July 2015