China, Hong Kong to allow cross-border sale of some funds to retail investors

Regulators in Hong Kong and China have agreed to a Mutual Recognition of Funds program that will allow asset managers in each market to sell certain funds to retail investors on the other side of the border starting July 1, The Wall Street Journal reported. The agreement will initially be capped at RMB300 billion (US$48 billion) flowing in and out of China each way, with only a few types of funds allowed to participate. “Global investors are looking to increase allocation into China” and the program gives them a way to access the domestic bond market, said Rajeev De Mello, head of Asian fixed Income at Schroders in Singapore.