HONG KONG: FAQs on Application Procedures for Authorization of Unit Trusts and Mutual Funds under the Revamped Process

Friday December 18 2020

The Securities and Futures Commission (SFC) has published the updated Frequently Asked Questions on Application Procedures for Authorization of Unit Trusts and Mutual Funds under the Revamped Process.

Updated FAQ:

Q: What fees do I have to pay? Is there any fee waiver?

A: In making application, they have to pay an application fee as set out below.

Upon the granting of authorization, they will also have to pay an authorization fee and the first annual fee according to the table below before the authorization is effective.

The applicable fees payable are as provided in the Securities and Futures (Fees) Rules (Cap. 571AF) (“Fees Rules”), subject to the SFC’s power to grant waiver pursuant to section 11 (waiver of fees) of the Fees Rules. Upon an application for fee waiver supported by valid reasons, if the SFC is of the opinion that the payment of any of the abovementioned fees would be unduly burdensome or inappropriate, the SFC may waive in whole or in part, the payment of any fees, or refund in whole or in part, any fees paid, subject to any applicable minimum amount.

Note 1: The SFC is prepared to consider an application for annual fee waiver if an application for withdrawal of authorization of a fund has been approved and the annual fee due date falls within the notice period of withdrawal of authorization.

Note 2: If a fund is authorized under multiple regimes (e.g. regime for SFC-authorized unit trusts and mutual funds and regime for mandatory provident funds) and each regime has its own set of fees, the SFC is prepared to consider an application for fee waiver and charge only one set of fees to avoid double charging.

Note 3: If an application is made for the authorization of a new fund (“New Fund”) established for the purposes of migrating an existing SFC-authorized fund (“Existing Fund”) to the New Fund, and the Existing Fund and New Fund are substantially the same with non-material changes to the documents already authorized or vetted by the SFC, the SFC is prepared to consider an application for waiver of the application fee in respect of the New Fund. In considering whether the Existing Fund and New Fund are substantially the same, the SFC will take into account, among others, factors such as their key operators, key features (e.g. investment objectives, policies and restrictions) and risk profile.

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