China has released a guideline on mutual recognition of funds (MRF) to help securities investment in the Chinese mainland and Hong Kong.
The scheme, launched on July 1 this year, allows funds domiciled on either side to be sold in the other's market. According to the guideline released by the People's Bank of China and State Administration of Foreign Exchange, only the total amount of MRF needs to be monitored, and no approval is needed for the quota of an institution or product.
The funds raised through trans-market issuance can flow between Hong Kong and the Chinese mainland in yuan and foreign currencies, or can be changed by agents at banks. Settlement via the yuan is encouraged, the guideline said.
