Hong Kong SAR, an international financial hub

Established in Hong Kong in 1958, BNP Paribas has built over the years a unique set-up to service institutional investors with a wide range of products and services.

Since 2008, we have invested in our asset servicing solutions and people to be the one-stop-shop for asset managers, asset owners and financial institutions looking to grow in the region and Greater China.

Our local fund experts in Hong Kong SAR

The Securities Services business of BNP Paribas is the one of only few providers globally capable of offering a full suite of fund administration services across all investment strategies and asset classes.

We have a comprehensive expertise in the Hong Kong market, the China Access schemes and fund vehicles enabling investments in traditional, private capital, liquid alternatives funds or hedge funds.

Leveraging on the Hong Kong SAR’s status as an international financial hub, we facilitate investment flows in and out of Greater China and support our clients’ cross border expansion across Asia and beyond.  

Our team of 130 local experts in Hong Kong SAR, along with our colleagues in Shanghai, support our clients whatever their investment and distribution strategies.

Our core services for Hong Kong funds

In addition to our comprehensive custody offer, we deliver the full suite of fund services: fund administration, middle office, transfer agency for local or cross border distribution, trustee, fund dealing services, derivatives execution and clearing, as well as performance, risk and ESG analytics.

We cover all asset classes, from traditional to liquid alternatives/hedge funds, as well as private capital funds (private debt, private equity, real estate and infrastructure).

We can also support clients with an integrated banking offer encompassing forex, share class hedging, securities lending, cash and collateral management, liquidity and financing solutions for funds.

Specific services for Hong Kong funds

• Coverage of all Hong Kong schemes such as mutual funds, ETFs, private and public open-ended fund companies (OFCs), Limited Partnership Fund (LPF) regimes for international distribution and common fund structures for alternatives clients
• Innovative and comprehensive support for all the schemes to access China’s equities, funds and bonds markets: Bond Connect, China Interbank Bond Market (CIBM Direct), Stock Connect including Shanghai and Shenzhen-Hong Kong and Shanghai-London and the Qualified Foreign Investor (QFI) scheme
• Support for the various bilateral Mutual Recognition of Funds (MRF) schemes with France, Luxembourg, Switzerland and the UK
• Full end-to-end servicing for private capital funds from fund administration to limited partners management
• Financing solutions embedded within our administration offer
• Systematic performance fee calculation for liquid alternatives/hedge funds and private capital funds
• Loan administration solutions for both fund managers and asset owners dealing with syndicated loans and direct lending
• Investor services for alternatives: AML/KYC for investors, fund and investor registry, reporting including capital account statements to investors and FATCA/AEOI reporting support

A recently expanded toolbox with additional / alternative requirements for specific products…

• Collective investment schemes can either take the form of a unit trust or an Open-ended Fund Company (OFC) established as a limited liability company, subject to authorisation by the Securities and Futures Commission (SFC)
• The Code on Unit Trusts and Mutual Funds imposes specific rules for specialised schemes such as money market funds, index funds or structured funds (including synthetic ETFs)

…with significant flexibility for fund structuration, management and access to mainland China

• Possibility to set up single funds, umbrella and master-feeder structures. Under certain conditions, a feeder may be authorised, notably if the master fund is a recognised jurisdiction scheme^[1] subject to an acceptable inspection regime^[2] or if the master fund is recognised under a mutual recognition of funds scheme (e.g. China)
• Investment management must be delegated to a licensed manager who can sub delegate portfolio management to an investment manager located in a jurisdiction included in the list of the SFC or to an affiliate in other jurisdictions (subject to certain conditions)
• No quantitative minimum capital or net asset value requirement but size should be sufficient to allow for a cost-efficient management of the fund
• Minimum one regular dealing day per month
• Possibility to apply for mutual recognition and distribution in mainland China and other jurisdictions from time to time
• Flexibility to use Hong Kong Financial Reporting Standards, International Financial Reporting Standards (IFRS) or other accounting standards acceptable to the SFC

ESG disclosure requirements for asset managers

Rules reflecting recommendations of the Task Force on Climate-Related Financial Disclosures have been implemented in the Fund Manager Code of Conduct and a Circular to Licensed Corporations.

Since 2022, large fund managers (above HKD 8 billion of assets under management) must address climate risks in their governance, investment management, risk management and disclosures. Smaller fund managers must comply with baseline requirements as from November 2022, when enhanced standards started to apply to large fund managers. Disclosure requirements apply at fund manager or fund level.

In November 2023, in an effort to tackle greenwashing, HKMA published a circular setting standards on the sale and distribution of green and sustainable investment products by Registered Institutions.

HKEX and SFC are working on a roadmap to require respectively listed issuers and financial institutions to comply with a regulation covering broader sustainability topics (not just climate) in line with globally-recognized International Sustainability Standards Board (ISSB) framework. 

A  choice of onshore vehicles for different types of alternative strategies…

• Onshore restricted schemes can be set up as open-ended fund companies (OFC) or Limited Partnership Funds (LPF)
• They can be used for a wide range of liquid alternative strategies (long/short, leverage, derivatives)

…which can be tailored for different fund management and operating models

• The investment manager is subject to basic eligibility requirements and custody arrangements must be in place
• No restriction on investment scope
• Flexible redemption terms to investors
• An auditor must be appointed for the purpose of auditing annual financial statements prepared according to Hong Kong Financial Reporting Standards, International Financial Reporting Standards (IFRS) or other accounting standards

ESG disclosure requirements

Rules reflecting recommendations of the Task Force on Climate-Related Financial Disclosures have been implemented in the Fund Manager Code of Conduct and a Circular to Licensed Corporations.

Since 2022, large fund managers (above HKD 8 billion of assets under management) must address climate risks in their governance, investment management, risk management and disclosures. Smaller fund managers must comply with baseline requirements as from November 2022, when enhanced standards started to apply to large fund managers. Disclosure requirements apply at both fund manager and fund level.

In November 2023, in an effort to tackle greenwashing, HKMA published a circular setting standards on the sale and distribution of green and sustainable investment products by Registered Institutions.

HKEX and SFC are working on a roadmap to require respectively listed issuers and financial institutions to comply with a regulation covering broader sustainability topics (not just climate) in line with globally-recognized International Sustainability Standards Board (ISSB) framework. 

A choice of onshore vehicles fit for private capital funds in Hong Kong…

• A choice of vehicles tailored for open-ended and closed-ended structures: private Open-ended Fund Company (OFC), Limited Partnership Fund (LPF) and Real Estate Investment Trust (REIT)
• In addition, we support fund structures in other jurisdictions, e.g. Cayman Islands, British Virgin Islands.
• Allowing all asset classes: private equity, venture capital, private debt, real estate, infrastructure

…with flexible features catering for different investor targets, investment strategies and redemption policies

• LPFs and REITs without legal personality (usually recognised as tax transparent) and private OFCs with legal personality (taxable)
• No restrictions on investment or borrowing for privately offered OFCs and LPFs
• Flexibility to determine redemption frequency, impose redemption restrictions or benefit from stock exchange liquidity
• Required to produce annual audited financial statements

ESG disclosure requirements

Rules reflecting recommendations of the Task Force on Climate-Related Financial Disclosures have been implemented in the Fund Manager Code of Conduct and a Circular to Licensed Corporations. While the initial focus is on climate-related risk, fund managers are encouraged to consider other sustainability risks.

Since 2022, large fund managers (above HKD 8 billion of assets under management) must address climate risks in their governance, investment management, risk management and disclosures. Smaller fund managers must comply with baseline requirements as from November 2022, when enhanced standards started to apply to large fund managers. Disclosure requirements apply at both fund manager and fund level.

In November 2023, in an effort to tackle greenwashing, HKMA published a circular setting standards on the sale and distribution of green and sustainable investment products by Registered Institutions.

HKEX and SFC are working on a roadmap to require respectively listed issuers and financial institutions to comply with a regulation covering broader sustainability topics (not just climate) in line with globally-recognized International Sustainability Standards Board (ISSB) framework. 

Discover our Hong Kong market expertise in mutual funds, private capital funds and hedge funds