Hong Kong’s Securities and Futures Commission (SFC) will introduce revised retail fund rules in November 2026.
The SFC confirmed the measures in its newly published consultation conclusions paper.
Under the revised Code on Unit Trusts and Mutual Funds (UT Code), retail funds may adopt a Value-at-Risk (VaR) approach.
VaR is a statistical measure of potential fund losses over a given period. Funds will be able to apply it when managing their derivative exposure.
According to the SFC, the change will support broader fund strategies and widen the range of retail products available to investors.
In addition, the revised code streamlines requirements for management company acceptability and feeder funds.
These measures give fund managers greater operational flexibility. At the same time, the code strengthens safeguards for liquidity risk management and money market funds.
Respondents to the consultation, which opened in October 2025, generally supported the proposals.
Following further industry engagement, the SFC will adopt them with appropriate modifications and clarifications.
“These enhancements will strengthen investor protection and help position Hong Kong’s retail fund regime for the future, ensuring that it remains competitive to keep in step with evolving market needs,”
said Elisa Ng, Executive Director of Investment Products at the SFC.
Furthermore, the SFC will amend four related codes. These cover pooled retirement funds, MPF products, investment-linked assurance schemes and real estate investment trusts.
The SFC will gazette the revised codes on 16 October, and they will take effect on 1 November 2026.
Existing SFC-authorised funds will generally have a 12-month transitional period from the effective date of the revised UT Code.
The same timetable will apply to the four related codes. To facilitate the transition, the SFC will publish supplementary guidance, FAQs and revised templates in the near future.
Featured image: Edited by Fintech News Hong Kong, based on image by Securities and Futures Commission (SFC) via its website and swampfire via Magnific.