On 17 September 2025, the Securities and Futures Commission (SFC) of Hong Kong and the Securities and Commodities Authority (SCA) of the United Arab Emirates (UAE) signed a Memorandum of Understanding concerning the Mutual Recognition of Investment Funds and Investment Management Companies and related Cooperation (MoU), establishing a bilateral framework for Mutual Recognition of Funds (MRF) between Hong Kong and the UAE. On the date of signing the MoU, the SFC and SCA each issued a circular on MRF (SFC Circular and SCA Circular).
The MRF scheme allows eligible UAE-domiciled funds licensed by the SCA (UAE Investment Funds) and Hong Kong-domiciled funds authorised by the SFC (HK Investment Funds) to be approved and authorized (as applicable) under a streamlined vetting process and distributed in each other’s jurisdiction, subject to specific regulatory requirements.
Eligible types of funds
At the moment, only the following types of UAE Investment Funds and HK Investment Funds are eligible:
a) general equity funds, bond funds, mixed funds, and funds that invest in other schemes;
b) unlisted index funds;
c) exchange-traded funds (ETFs), including passively managed index-tracking ETFs and non-complex active ETFs; and
d) feeder funds, whose underlying funds are authorised by the SCA (for UAE Investment Funds) or the SFC (for HK Investment Funds) and fall within one of the fund types above.
The relevant fund must not have share classes with hedging arrangements other than currency hedging.
Accessing Hong Kong
To access the Hong Kong market, a UAE Investment Fund must be licensed by the SCA for public offering in the UAE. It must be managed by a UAE investment management company that is licensed by the SCA to manage collective investment schemes under UAE law, or alternatively the UAE Investment Fund may be a self-managed scheme. Any investment delegates must be operated in a jurisdiction with an acceptable inspection regime – the list is available here: https://www.sfc.hk/-/media/files/PCIP/List-of-AIR/List-of-AIR_Eng_20250918.pdf. The UAE Investment Fund must also appoint a firm in Hong Kong to serve as its Hong Kong representative. The eligibility requirements and other requirements applicable to the UAE Investment Fund and UAE investment management company (if applicable) are set out in the SFC Circular.
Accessing the UAE
In order to enjoy a streamlined process of SCA approval under the arrangement, a HK Investment Fund must be authorized by the SFC and managed by a Hong Kong management company licensed to conduct Type 9 regulated activity (asset management). Any investment delegates must be based in a jurisdiction recognized under the UAE regulations. The HK Investment Fund must also appoint a SCA licensed promoter firm in the UAE as its representative. Specific eligibility requirements and other requirements applicable to the HK Investment Fund and Hong Kong investment management company are detailed in the SCA Circular.
The MRF with the UAE is the latest addition to the suite of MRF schemes already in place between Hong Kong and other markets. The full list of the SFC’s MRF arrangements is available here: https://www.sfc.hk/en/Regulatory-functions/Products/List-of-publicly-offered-investment-products/Mutual-recognition-of-funds-arrangements.
