The following updates are examinable from 12 January 2026
TOPIC 1 – GENERAL REGULATORY FRAMEWORK
Margin Requirements for Non-centrally Cleared OTCD Transactions Open-ended Fund Companies
Transactions subject to the requirements
- IM (Initial Margin)/VM (Variation Margin) requirements generally apply to all NCC OTCD transactions, however they do not apply to certain physically settled FX transactions, certain commodity forward transactions, certain currency contracts and on or before 3 January 2026, certain options transactions
TOPIC 2 – BACK-OFFICE COMPLIANCE
No updates
TOPIC 3 – ASSET MANAGEMENT REGULATIONS
Authorization Procedures under the Code on Unit Trusts and Mutual Funds (UT Code)
The SFC will determine the authorisation process for new fund applications on a case-by-case basis under the following three streams:
- Fund Authorisation Simple Track (FASTrack): covers simple funds domiciled in MRF (Mutual Recognition of Funds) jurisdictions including Mainland China, Switzerland and the UK that seek authorisation for public offering in Hong Kong. The intention is to grant authorisation (if successful) within 10 business days of the SFC formally taking up the application. A new fund application will be processed if the following criteria are met:
- The fund is:
- An equity, bond or mixed fund;
- An ETF or unlisted index fund tracking an index which is adopted by other existing SFC-authorised fund(s) or is a plain vanilla index; or
- A feeder fund where the underlying master fund is eligible for FASTrack
- The fund is not a deliverable fund and does not have novel features
- The fund management company is located in an MRF jurisdiction or a jurisdiction with an inspection regime acceptable to the SFC
- If applicable, the investment delegate is located in an MRF jurisdiction or a jurisdiction with an inspection regime acceptable to the SFC
- The application is free of material issues
- The fund is:
- Standard Applications: that are less complicated in nature and are not eligible under FASTrack. Authorisation takes, on average, between one to two months from the Take-up Date. They must meet the following criteria:
- Is a sub-fund under an existing SFC-authorised umbrella fund
- The new sub-fund complies with Chapter 7 of the UT Code
- Is not seeking authorisation as an approved pooled investment fund under the SFC Code on MPF Products
- The fund management company is located in an MRF jurisdiction or a jurisdiction with an inspection regime acceptable to the SFC; and
- Application has no material issues and/or policy implications, as considered by the SFC
- Non-Standard Applications: processed with an aim to grant authorisation on average between two to three months from the Take-up Date. Applies to new funds that are a leveraged or inverse product; a futures based unlisted index fund or passive ETF; a fund that invests 90% or more of its NAV in a single CIS (ie a feeder fund), or a fund with guaranteed features
MUTUAL RECOGNITION OF FUNDS (MRF)
Eligible Funds
- Only specified funds may apply under the MRF scheme. Currently they are:
- General equity funds
- Bond funds
- Mixed funds
- Unlisted index funds
- Physical index-tracking ETFs
- Recognised Mainland Funds must be registered with the CSRC for sale in Mainland China and must:
- Have been established for more than one year
- Have a minimum fund size of RMB200 million
- Not invest primarily in the Hong Kong market
- Have no more than 80% of its total assets held by Hong Kong investors
Requirements on Management Firms and Custodians
- Mainland management firms and custodians of Recognised Mainland Funds must comply with applicable Mainland laws
- A Mainland management firm must be licensed by the CSRC
- A Mainland custodian must be qualified to act as custodian of publicly offered investment funds
- SFC requires management firms not to have been the subject of any CSRC regulatory actions in the three years prior to application
- SFC prohibits Mainland management firms from delegating management functions to anyone operating outside the Mainland
- Mainland management firms can delegate management functions to an acceptable inspection regime recognised under the UT Code and is in the same group as the management firm
TOPIC 4 – MISCONDUCT
No updates
