- Asia has become the main non-European market for UCITS funds, totaling approximately 62% of total UCITS registrations outside of Europe
- Luxembourg is Europe's leading financial center in terms of RMB denominated investment funds
- The Chinese equity market has grown to the second largest equity market in the world after the US
- The Shanghai-Hong Kong Stock Connect program represented one of the biggest developments for foreign investors wishing to access this market
The Association of the Luxembourg Fund Industry (ALFI) celebrated the fifth anniversary of the opening of its Asia Office in Hong Kong at its annual roadshow. Asia has become the main non-European market for UCITS funds, totaling approximately 62% of total UCITS registrations outside of Europe.
Luxembourg’s position as the international fund center of reference continues to grow in Asia, with over 700 people attending ALFI’s financial seminars in Tokyo, Tapei and Hong Kong this week.
“Through our ongoing activities in Asia, we have developed strong relationships with stakeholders from the various Asian fund jurisdictions and we continue to work with them on key issues that impact the industry,” said Camille Thommes, general director of ALFI.
“Since the opening of our office in Hong Kong five years ago, the Chinese economy and financial markets have undergone a remarkable transformation and seen significant growth. More specifically, the Chinese equity market has grown to the second largest equity market in the world after the US,” said Thommes.
“ALFI has helped to make significant in-roads into the opening up of China’s capital markets. Luxembourg was the first country to authorize an RQFII UCITS in 2013 as well as the first country to authorize a UCITS to invest through the Shanghai – Hong Kong Stock Connect program,” added Thommes. “Luxembourg is also Europe's leading financial center in terms of RMB denominated investment funds.”
Launched in November 2014, the Shanghai-Hong Kong Stock Connect program represented one of the biggest developments for foreign investors wishing to access this market and enabled foreign investors to trade Shanghai-listed shares via the Hong Kong stock exchange, and mainland investors to invest in Hong Kong shares via the Shanghai stock exchange.
Over the past year, 69 Luxembourg UCITS funds as well as 12 alternative funds have received approval from the Luxembourg Supervisory Authority, the CSSF, to access Stock Connect. The RQFII scheme was launched in Hong Kong in 2011 and has been expanded to other jurisdictions since 2013, allowing an increased volume of offshore RMB to be reinvested into China’s securities markets. In April this year, the People’s Bank of China granted a RMB 50 billion Qualified Foreign Institutional Investor (RQFII) quota to Luxembourg. ICBC (Europe) and Bank of China Luxembourg both recently received regulatory approval as the first Luxembourg-based RQFII holders.