The recently-launched MFR regime between China and Hong Kong continues to prompt investment houses to bring out new offerings.

Schroder Investment Management (Hong Kong), part of the UK-listed private bank and asset manager Schroders, is partnering with its mainland China joint venture, Bank of Communications Schroder Fund Management Co, to take advantage of the newly-launched Mutual Recognition of Funds regime between China and Hong Kong.

The agreement means that Bocom Schroders will serve as the master agent for Schroders’ funds on the mainland and be responsible for fund registration, liaising with regulators, distribution via its established network, and providing support on fund marketing initiatives, a statement from Schroders said yesterday.

The move is another example of firms taking advantage of the MFR regime, under which funds can be bought and sold between Hong Kong and its mainland China neighbour in a way that has echoes of the pan-European UCITS funds regime. It is also a part of moves by China to open its financial markets to international investors as seen with last year’s start of the Hong Kong/Shanghai Stock Connect link.

Schroders said that assets under of management of the mainland China mutual fund market were RMB 5.24 trillion ($843,766 billion) as of 31 March.

Developments in China have not all been smooth from an investment point of view in recent weeks, however. The country has suffered a slide in its stock market, prompting the authorities to temporarily shutter initial public offerings and create a stabilisation fund to contain financial fallout.

“Since the Bocom Schroders’ establishment in 2005, we have a very close working relationship, particularly on our investment capabilities and QDII business. We believe Bocom Schroders has comprehensive knowledge of the Schroders brand and our investment philosophy. Together with its strong distribution network, it could best represent and deliver our investment proposition to mainland investors,” Lieven Debruyne, CEO, Hong Kong, Schroders, said.

As part of the agreement, Schroders said that its Schroder Asian Asset Income Fund, domiciled in Hong Kong, has been submitted for authorisation with the China Securities Regulatory Commission. This is an Asia-focused multi-asset product with HK$43.00 billion ($5.55 billion) as of 29 May 2015.

Bocom Schroders was established in 2005 by Schroders, Bank of Communications and China International Ocean Shipping Container (Group), with each party holding a 30 per cent, 65 per cent and 5 per cent stake in the business respectively.