Hong Kong Securities and Futures Commission Signs Memorandum of Understanding on Mutual Recognition of Funds with UAE to Expand Public Funds into the Middle East Market

The Securities and Futures Commission of Hong Kong and the Securities and Commodities Authority (SCA) of the United Arab Emirates (UAE) recently officially signed a Memorandum of Understanding to expand the cross-border market connectivity of public funds under the mutual recognition arrangement. This agreement signifies the first establishment of a mutual recognition mechanism for funds between Hong Kong and the Middle East market, and is also the first cooperation between the UAE and a jurisdiction outside of the Middle East. Under the arrangement of the Memorandum of Understanding, non-listed overseas funds will be able to directly offer to retail investors in the UAE for the first time, and the distribution network of Hong Kong public funds will therefore extend to the Middle East region. Industry insiders believe that this will bring more diversified investment choices to investors in both regions and further enhance Hong Kong's position as an international asset management and fund sales hub. A spokesperson for the Securities and Futures Commission stated that this collaboration demonstrates the connectivity advantage of Hong Kong as an international financial center and helps drive the openness and integration of capital markets in both regions. He pointed out that the mutual recognition arrangement not only helps strengthen Hong Kong's role as a fund sales hub in Asia, but also opens up new growth opportunities for Hong Kong's asset management industry. On the side of the Securities and Commodities Authority of the UAE, it emphasized that the Hong Kong market enjoys international recognition in fund regulation, product innovation, and investor protection. This collaboration will enrich the cross-border investment channels for retail investors in the UAE and further promote the development of the local capital markets. Market analysts point out that this move is expected to attract more international fund management companies to enter the Middle East market through Hong Kong, while also providing convenience for UAE investors to access Asian and international assets. With the increasing demand for diversified asset allocation in the Middle East market, financial cooperation between Hong Kong and the UAE is expected to continue to deepen.