On Oct. 7, 2026, HK SFC said it will implement proposed measures to bolster Hong Kong’s regulatory regime for SFC-authorized retail funds, as set out in its consultation conclusions paper.
The regulatory enhancements to the Code on unit trusts and mutual funds underscore HK SFC’s commitment to protecting investors and aligning the regulatory framework with international standards.
Respondents generally supported the proposals and having considered the feedback received and conducted additional industry engagement, HK SFC will adopt the proposals with appropriate modifications and clarifications.
The revised code will become effective, tentatively on Nov. 1, 2026, and a 12-month transitional period from effective date will be set out for existing SFC-authorized funds.
These four revised codes will be gazetted on Oct. 16, 2026, and become effective on Nov. 1, 2026, with a 12-month implementation period.
On Oct. 22, HK SFC proposed revision to code on unit trusts.
HK SFC issued Consultation paper on proposed amendments to the Code on unit trusts and mutual funds, to align SFC-authorized funds with international regulatory standards.
The proposals update requirements for fund liquidity risk management to strengthen overall resilience.
Key Proposals
Proposals include allowing the value-at-risk (VaR) approach alongside the existing net derivative exposure method, giving qualified fund managers greater flexibility and aligning with global practices.
Incorporating the latest international standards for liquidity risk management in open-ended funds, in particular, IOSCO’s May 2025 report (#233003).
Ensuring alignment between the liquidity of a fund’s asset holdings and its redemption terms, and requiring anti-dilution tools for funds investing in less liquid assets.
Introducing a phased approach to allow retail investors access to private markets, starting with listed closed-ended funds and later extending flexibility for unlisted funds with strong safeguards.
Strengthening requirements in line with FSB recommendations, including mandatory anti-dilution tools, stricter standards for eligible instruments, and clearer rules for constant NAV money market funds (MMFs).
Additional refinements include clearer standards for management companies, simplified feeder fund authorizations, and consolidated rules for specialized schemes to improve efficiency.
Consultation End
Comment period of this consultation closes on Jan. 21, 2026.
In Sep. 2026, HK SFC issued guidance on funds exposed to private markets, #311410.
Oct. 2026 Consultation Conclusions Paper
On Oct. 7, 2026, HK SFC said it will implement proposed measures to bolster Hong Kong’s regulatory regime for SFC-authorized retail funds, as set out in its consultation conclusions paper.
The regulatory enhancements to the Code on unit trusts and mutual funds underscore HK SFC’s commitment to protecting investors and aligning the regulatory framework with international standards.
Respondents generally supported the proposals and having considered the feedback received and conducted additional industry engagement, HK SFC will adopt the proposals with appropriate modifications and clarifications.
The revised code will become effective, tentatively on Nov. 1, 2026, and a 12-month transitional period from effective date will be set out for existing SFC-authorized funds.
