THE securities regulator on the mainland said Sunday it would allow local asset management firms to set up units in Hong Kong as part of its efforts to improve the management of domestic fund companies.

    Mainland fund firms can set up their Hong Kong branches or representative offices under the Closer Economic Partnership Arrangement, the China Securities Regulatory Commission said in a statement.

    The regulator said the measure would take effect immediately.

    “Applicants should have clear commercial objectives and plans and must ensure that their financial conditions will remain sound after the establishment of the Hong Kong units,” the regulator said in the statement.

    Mainland fund management companies had to set up Hong Kong units within six months upon the approval of the China Securities Regulatory Commission, the regulator said.

    “The new measures represent a milestone for mainland fund management companies, providing them with a platform to familiarize themselves with international investment and regulatory practices,” Eddy Fong, chairman of Hong Kong’s Securities and Futures Commission, said in a statement.

    “Both fund industries in Hong Kong and mainland will also benefit from increased opportunities to strengthen their co-operation,” he said.

    Mainland fund management firms are already able to participate in the Hong Kong market through their subsidiaries. (SD-Agencies)