Ireland and Hong Kong agree recognition of UCITS and public funds

On 14 May 2025, the Central Bank of Ireland (the Central Bank) and Hong Kong’s Securities and Futures Commission (SFC) published Circulars (here and here, respectively) announcing that they had entered into a Memorandum of Understanding on a process for Mutual Recognition of Funds (MRF).

The agreement covers eligible Central Bank authorised UCITS and Hong Kong public funds and provides for

• Irish UCITS that meet specific criteria to be authorised by the SFC for sale in Hong Kong under an expedited approval process and
• eligible Hong Kong public collective investment schemes to be offered in Ireland for the first time.

Requirements to use the MRF

(a) Irish funds marketed in Hong Kong

Eligible simple funds domiciled and regulated in Ireland will be able to be processed under the SFC’s Fund Authorisation Simple Track (or FASTrack), under which the SFC undertakes to complete authorisation within 15 business days.

To be eligible under the Memorandum, an Irish UCITS must (among other things)

• be authorised by the Central Bank
• be allowed to be offered, marketed and distributed to retail investors in Ireland
• operate and be managed in accordance with the relevant laws and regulations in Ireland and its constitutive documents
• comply with the applicable sale and distribution laws and regulations in Hong Kong and
• ensure that investors in both Ireland and Hong Kong receive fair treatment, including in respect of investor protection, exercise of rights, compensation and disclosure of information.

In particular, an Irish fund must comply with the eligibility requirements set out at paras 7 to 10 and Annex B of the SFC Circular.

These include (and the following list is not exhaustive) that the fund must:

• be one of the following eligible fund types
  • a general equity fund, bond fund, mixed fund and fund that invests in other schemes
  • a feeder fund, where the underlying funds are of a type specified by this section of the Annex
  • an unlisted index fund;
  • a passively managed index tracking ETF
  • a listed open-ended fund (‘active ETF’)
• comply with a leverage limit of 100% of the fund’s NAV (calculated under the commitment approach)
• not invest in physical commodities (including precious metals, commodity based investments or real estate), crypto-assets or crypto-currencies (or certificates representing them)
• appoint a HK representative.

(b) Hong Kong funds being marketed in Ireland

The eligibility requirements applicable to Hong Kong funds are set out in the Central Bank’s circular and Annex A.

Unsurprisingly, they are extremely similar to those applicable to Irish funds (see above).

The Hong Kong fund, for example, must

• be authorised by the SFC in Hong Kong and be allowed to be offered, marketed and distributed to the public in Hong Kong;
• be one of the same eligible fund types as listed
• comply with a leverage limit of 100%, calculated under the commitment approach and
• provide a facilities agent in Ireland

The application process for Hong Kong funds is set out at paras 43 to 51 of the Central Bank’s Circular. Provided that the Hong Kong fund meets all the applicable requirements set out in the circular, the Central Bank will approve it within one month from the day following receipt of the application documents.