The Hong Kong government is seeking public comments on its proposed OFC structure amendments aimed at relaxing the legal scheme that governs investment fund vehicles.

The Hong Kong government has begun calling for feedback on its proposed amendments aimed at relaxing the legal structure governing investment fund vehicles, seen as a measure to boost attractiveness of these structures.  

According to the government, for the territory to truly establish itself as an international financial centre, an open-ended fund company structure has to be allowed for investment fund firms, giving them more flexibility in setting up and operating funds locally. At present, an open-ended investment fund may be built in the form of a unit trust but not as a corporation. 

The move can be seen as a way in which Hong Kong, facing international and Asian competition as a financial centre, is seeking to make its investment and financial services sector more competitive and appealing. Last year, Hong Kong rolled out changes to a trusts regime that had not been upgraded for decades.

In the proposed OFC structure, the government proposes that it will be an open-ended collective investment scheme structured as a corporation with limited liability and variable share capital. It also suggests that the new vehicle will be established under the Securities and Futures Ordinance and regulated and supervised by the Securities and Futures Commission. The OFC structure is the norm in majority of international fund centres.

The full text of the consultation is available for feedback until 19 June 2014. The Financial Services and the Treasury Bureau, the SFC and relevant government departments will work on the details set out in the paper and said they will take into account comments received.