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Hong Kong’s Financial Services and the Treasury Bureau (FSTB) is considering working with Qianhai, a special economic zone in Shenzhen, to help private equity funds incorporated in Hong Kong to invest in Mainland China though simpler approval procedures, reported Hong Kong’s Sing Tao Daily citing Christopher Hui, Secretary for Financial Services and the Treasury.
Although foreign private equity funds can use other ways to directly invest in the mainland without going through Hong Kong, the new proposal with Qianhai will provide Hong Kong-registered funds with an option that needs fewer approval procedures or fewer restrictions when investing in the mainland, Hui said.
Such a partnership, if materialized, would be a regulatory collaboration in some ways to reflect China’s recognition of the fund registration system in Hong Kong and will also be seen as the first stage of “Private Equity Fund Connect”, said Hui.
China and Hong Kong have already launched a series of connect schemes facilitating cross-border investments in stocks, bonds, exchange-traded funds and interest rate swaps.
Hong Kong is also working with Qianhai to allow Hong Kong accountants who are not qualified to practice in the mainland to work as partners in accounting firms in Qianhai, Hui said.