The move represents another step by China to widen access to its capital markets, coming about half a year after the Hong Kong/Shanghai Stock Connect link was enacted. That link has seen a significant uptick in trading volumes between the jurisdictions in recent weeks.

The ability of funds to be sold across borders is already a common feature in regional blocs such as the European Union with its UCITS funds regime, for example.

Hang Seng Bank’s executive director and head of global banking and markets, Andrew Fung, said the launch of the new scheme was good news for the region.

“In broadening the range of cross-border investment channels and further opening up the capital account in mainland China, this move represents a major milestone in the development of investment markets on the mainland and in Hong Kong. The initiative allows fund industries in both markets to pursue new business opportunities and offer more investment options to investors,” Fung said in a statement on Friday.

“The announcement of the mainland-Hong Kong mutual recognition of funds rule is a very significant milestone development for Hong Kong and mainland fund industry,” the Hong Kong Investment Funds Association said in a statement late last week.

“From the fund industry perspective, global asset management firms can now offer their Hong Kong qualified retail funds to mainland investors though their licensed fund distributors in the mainland, and mainland asset management firms can also offer their mainland qualified funds to Hong Kong investors through their licensed fund distributors in Hong Kong,” the association said.  

“From investors’ point of view, Hong Kong investors will be able to access mainland investment market through an expanded range of professionally managed retail funds managed by qualified mainland asset management firms, and mainland investors will be able to access global investment opportunities via qualified global asset management firms from Hong Kong,” it added.