Hong Kong and UAE Ink Mutual Fund Recognition Deal to Deepen Market Links

By Wang Xiaoqing and Denise Jia

Hong Kong and the United Arab Emirates signed a landmark agreement enabling mutual recognition of investment funds, marking the first such pact between Hong Kong and a Middle Eastern market.

The memorandum of understanding (MOU), signed between Hong Kong’s Securities and Futures Commission (SFC) and the UAE’s Securities and Commodities Authority (SCA), will enable funds registered in either market to be sold to retail investors in the other under streamlined approval processes.

The deal, effective immediately, was sealed during the Investopia Global – Hong Kong forum, where five MOUs were signed in total. Another agreement committed the Hong Kong Stock Exchange and the Abu Dhabi Securities Exchange to explore cross-market cooperation in areas such as ETFs, environmental, social, and governance (ESG) products, and dual listings. ADX CEO Abdulla Salem Alnuaimi said the collaboration will “help investors more easily access both markets, boost liquidity, and create innovative financial products.”

SFC CEO Julia Leung and SCA CEO Waleed Saeed Abdul Salam Al Awadhi signed the fund recognition pact, witnessed by Hong Kong Financial Secretary Paul Chan, UAE Deputy Minister of Investment Mohammad Alhawi, and other senior officials.

Leung called the agreement a milestone for regulatory cooperation, adding that it would help consolidate Hong Kong’s position as a premier fund domicile while reinforcing its role as a gateway between China and the Middle East.

The MOU covers four categories of funds: equity, bond, mixed-asset and other collective investment schemes; feeder funds; unlisted index funds; and exchange-traded funds (ETFs).

To sell in Hong Kong, UAE funds must appoint a local representative company under Hong Kong’s Code on Unit Trusts and Mutual Funds. Conversely, Hong Kong funds must designate an SCA-licensed promoter in the UAE to distribute their products.

Both regulators also agreed to recognize the qualifications of licensed fund managers in each other’s markets to act as trustees and conduct asset management activities, ensuring smoother market access.

Investor protection provisions were written into the pact. Prospectuses, financial reports, and key notices — such as trading suspensions — must be disclosed to investors in both markets at the same time, with documents provided in bilingual Chinese-English in Hong Kong and in English in the UAE.

Contact reporter Denise Jia (huijuanjia@caixin.com)

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

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