AMAC and ALFI Joint Task Force Concludes its Review of PRC and European Public Fund Regimes

AMAC and ALFI Joint Task Force Concludes its Review of PRC and European Public Fund Regimes

China Securities Lending Loans

The Asset Management Association of China (AMAC) and the Association of the Luxembourg Fund Industry (ALFI) announced today that a joint task force had completed its review of the PRC and European public fund regimes and reported its findings and conclusions to the governing body of each association.

The prime focus of the joint task force was to carry out a review of the rules applied in the People’s Republic of China (PRC) to publicly offered funds (open-ended) and the EU undertakings for collective investment in transferable securities (UCITS) under Luxembourg laws and regulations. 

AMAC and ALFI have partnered since June 2014, when they entered into a Memorandum of Understanding (MoU) to deepen the collaboration between the two associations. As part of the objective to create mutually beneficial opportunities for their members and to foster the exchange of information on the regulatory frameworks and investor protection practices in their respective jurisdictions, the associations established a joint task force in 2017 to increase understanding of the public fund regime in each country. Over the past 30 years, UCITS has achieved recognition as a truly globally distributed investment fund, and Luxembourg, as the largest domicile, has successfully positioned itself as the global leader for cross-border investment fund distribution of UCITS. 

Luxembourg UCITS are now an iconic product with wide retail and institutional cross-border distribution reaching investors in more than 70 markets. Assets under management of Luxembourg funds amounted to USD 4.6 trillion (*1) at 31 December 2018. 

Established in 1998, the PRC publicly offered fund market is growing at a phenomenal pace and reached RMB 12.76 trillion (USD 1.86 trillion) (*2)  at 31 December 2018. 

Commenting on the conclusions reached by the joint task force, Camille Thommes, Director General at ALFI, said: 'PRC financial institutions and asset managers are becoming increasingly international.  Luxembourg is the key connecting hub in Europe that can help players structure their outbound business and it is a safe place to headquarter China’s banks and investment platforms.' 

Camille Thommes continued: 'Several jurisdictions in Asia, particularly the PRC, have undertaken initiatives to facilitate the marketing of their domestic fund vehicles in Asia and beyond. The next step in the opening up of the PRC’s mutual fund market will be to have a discussion on the standards applied to retail funds in Europe and the PRC and levels of investor protection'.

Lei Hong, Chairman of AMAC added: 'It has been a tremendous experience for both the AMAC and ALFI teams of experts to have an in-depth exchange of views on the respective regulatory frameworks and administrative practices. Our joint task force is proud to make a summary of applicable rules and regulations for publicly offered funds available online for our members in both Chinese and English.'