Ireland and Hong Kong Launch Mutual Recognition of Funds Regime

Introduction

On 14 May 2025, the Securities and Futures Commission (“SFC”) of Hong Kong and the Central Bank of Ireland (“CBI”) updated their longstanding cooperative framework by entering into a memorandum of understanding (the “Memorandum”) to implement a Mutual Recognition of Funds (“MRF”) regime.

The launch of MRF between Ireland and Hong Kong marks a significant step in strengthening financial cooperation between the two jurisdictions. This initiative establishes a comprehensive framework for the mutual recognition of eligible investment funds, facilitating streamlined cross-border fund distribution and enhancing investor choice in both jurisdictions.

The regime is designed to enable these funds to be offered to the public in both markets under an expedited 15 business-day approval process, subject to meeting specified regulatory standards.

Irish Domiciled UCITS Marketed in Hong Kong

Eligibility Criteria

To qualify for authorisation by the SFC under the MRF regime, the Irish domiciled UCITS must fall within one of the following fund types:

• general equity funds, bond funds, mixed funds or funds investing in other schemes;
• feeder funds, provided the underlying funds are of an eligible type;
• unlisted index funds;
• passively managed index-tracking exchange traded funds (“ETFs”); or
• listed open-ended funds (“active ETFs”), which must be non-complex investment products.

In addition, the Irish domiciled UCITS must:

• adhere to a leverage limit of 100% of the fund’s net asset value, calculated using 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);
• not have share classes with hedging arrangements other than currency hedging; and
• be managed by an Irish management company, which complies with applicable CBI requirements.

Additional Considerations

Additional factors an Irish domiciled UCITS should consider include the requirements to:

• appoint a representative in Hong Kong;
• comply with all relevant sale, distribution and advertising laws and regulations in Hong Kong;
• provide offering documentation and notices in English and Chinese (constitutive documents and financial reports may be provided in English);
• ensure fair treatment of investors in both jurisdictions, particularly regarding investor protection, rights, compensation and disclosure; and
• ensure any SFC periodic fees are paid.

Authorisation Timeline

Applications are processed under one of two approaches:

• Fund Authorisation Simple Track (“FASTRACK”): For funds meeting the criteria of a “simple fund”, authorisation can be completed within 15 business days, provided the application is complete and of high quality.
• Two-Stream Approach: For all other cases, applications are categorised as either “Standard” or “Non-Standard”:
  • Standard Applications: Authorisation typically within 1–2 months.
  • Non-Standard Applications: Authorisation typically within 2–3 months.

Hong Kong Public Funds Marketed in Ireland

Similarly, under the CBI Circular, Hong Kong-covered funds must meet parallel eligibility requirements and be either general equity, bond, mixed, feeder, unlisted index, passively managed index tracking ETFs or listed open-ended active ETFs, provided they do not invest in crypto-assets or real estate.

Additional considerations for Hong Kong domiciled funds include the requirements to:

• be authorised by the SFC and be allowed to be offered, marketed and distributed to the public in Hong Kong;
• appoint a facilities agent in Ireland; and
• comply with all relevant sale, distribution and advertising laws and regulations in Ireland.

Provided the Hong Kong domiciled fund meets all the requirements set out in the CBI circular (and if not, a request for information is issued by the CBI), the CBI will approve the Hong Kong domiciled fund within a one-month period.

Conclusion

The MRF regime between Ireland and Hong Kong offers a streamlined pathway for eligible funds to access new markets, while maintaining robust investor protection standards. By simplifying the registration process, the regime provides increased predictability and shorter time to market.

Details of the circulars published by the SFC and the CBI may be found here and here.

How Maples Can Assist

With our extensive expertise in cross-border fund structuring and regulatory compliance, we are well-positioned to support clients navigating the MRF framework.

For Hong Kong funds seeking access to the Irish market:

• Eligibility Assessment: We can evaluate whether your Hong Kong-domiciled fund qualifies under the MRF criteria, ensuring alignment with CBI requirements.
• Application Support: Our team will assist in preparing and submitting the necessary documentation to the CBI, including offering documents, constitutional documents and regulatory confirmations.
• Facilities Agent: We can provide facilities agent services in Ireland, as required under the MRF provisions.
• Ongoing Compliance: Post-approval, we offer guidance on maintaining compliance with Irish regulatory obligations, including reporting and disclosure requirements.

For Irish funds seeking access to the Hong Kong market:

• MRF Eligibility Analysis: We assess your fund’s structure and investment strategy to determine eligibility under the SFC’s MRF criteria.
• FASTrack Application Process: Our team can guide you through the SFC’s Fund Authorisation Simple Track (FASTrack process, aiming for approval within 15 business days.
• Hong Kong Representative Coordination: We assist with the Irish regulatory review and CBI filing of the contracts appointing a qualified Hong Kong representative, a requirement for marketing funds in Hong Kong.
• Documentation & Translation: We will work with local counsel to ensure offering documents meet SFC standards, including necessary translations and disclosures.

The Maples Group’s Irish legal services team is independently ranked first among legal service providers in Ireland in terms of total number of funds advised. The Maples Group’s Global Registration Services is integrated within our Funds & Investment Management Group and provides cross-border fund registration services in all key distribution markets.

Our core services provide support throughout the distribution chain to include market intelligence, market entry (through private placement or public offering) and maintenance of ongoing reporting and filing obligations.

For more information or to discuss how we can support your cross-border fund initiatives under the MRF framework, please contact your usual Maples contact or one of the primary contacts listed.