News Brief: MRF fund sales suspensions in China – Singapore's slower licence approvals – Asia's fund industry braces for Trump 2.0
JPMorgan AM, ChinaAMC and E Fund have in the past week been forced to halt sales of funds sold in China via the Hong Kong-Mainland Mutual Recognition of Funds scheme.?The?suspensions came just days after a decade-old sales cap in the cross-border initiative was relaxed to allow more flows from Chinese investors into offshore funds.
JPMorgan AM reopened two global bond funds on January 6 after the cap on MRF fund sales in China was increased from 50 to 80 per cent of total assets, but then?shut?the funds again after they attracted around US$400mn in just a few hours. Read more about the impact of the MRF sales cap changes?here.
Some fund firms have given up on applying for licences in Singapore due to longer approval times and are setting up in Hong Kong instead, sources told Ignites Asia.?New applicants have faced greater regulatory scrutiny in Singapore following a high-profile money laundering scandal and this has contributed to a rise in the number of licenced entities in Hong Kong.
Fund licence approvals in Singapore can now take up to 12 months, up from less than 4 months in 2021, with the longer wait due to stricter requirements around company personnel and shareholders, compliance experts said. Read more about Singapore's longer fund licence processing times?here.
Fund companies in Asia are bracing for greater market volatility and geopolitical uncertainty with Donald Trump's return to the White House.?Aside from threats of a full-blown US-China trade war, experts point to wider impacts associated with Trump's policy direction, not least on business interests in China.
"The more you're part of the US-China geopolitical story, the greater the risks," Isaac Stone Fish, chief executive and founder of Strategy Risks, told Ignites Asia. Read more about possible impacts of the President-elect's trade and investment policies?here.
Graph of the week
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Institutions in the Gulf states and Asia were the main drivers as assets of global sovereign investors "soared to new heights" last year rising 6.4 per cent to US$54.9tn, according to new data from Global SWF. Read more about the largest sovereign investors in the Middle East, China and Singapore?here.