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The CMU offers a standardised and automated platform that provides a secure and efficient way to streamline investment fund transaction processing and enhance the fund trading cycle. With the launch of the Mainland-Hong Kong Mutual Recognition of Funds (MRF), participants can enjoy a simplified procedure to obtain authorisation for retail distribution in the other jurisdiction, embodying a commitment to fostering connections and innovation.
CMU Fund Order Routing and Settlement Service
Launched in August 2009, the CMU Fund Order Routing and Settlement Service provides members with a standardised platform for processing investment fund transactions between local and overseas investment houses, distributors, custodians, and transfer agents, along with the cash settlement of investment fund shares through the RTGS systems in Hong Kong.
Scope of Operation
- Handling of Investment Fund Transactions: Processes subscriptions, redemptions, and switching orders efficiently.
- Automated Confirmations and Payments: Generates corresponding confirmation and payment instructions.
- Regular Reporting: Provides regular reports for transparency and monitoring.
Click to view original imageBenefits
- Operational Efficiency: Streamlined fund transaction processing enhances efficiency and shortens the fund trading and settlement cycle.
- Risk Mitigation: The standardised and automated platform mitigates operational risks and reduces back-office costs.
- Real-Time Monitoring: Enables real-time status monitoring of both transactions and payments, empowering participants to navigate markets with ease.
Mainland-Hong Kong Mutual Recognition of Funds (MRF)
Following the launch of MRF in July 2015, which allows eligible Mainland and Hong Kong recognised funds to be distributed to retail investors in each other's market, connections have been established with transfer agents (TAs) and fund houses (FHs) in the Mainland, including the China Securities Depository and Clearing Corporation Ltd (ChinaClear). With the MRF service, fund orders are processed in an automated and efficient manner, fostering infinite opportunities across borders.
MRF service includes:
- Routing of order instructions from CMU Members who are distributors of recognized Mainland investment funds eligible for MRF to TAs/FHs including ChinaClear in the Mainland for Southbound MRF;
- routing of order instructions from ChinaClear who consolidates the orders of recognised Hong Kong investment funds eligible for Northbound MRF to TAs/FHs in Hong Kong;
- Distribution of Mainland investment fund information such as Net Asset Value (NAV), corporate events, fund status etc;
- Provision of custody operation information; and
- Provision of regular reports
Eligibility
More details on the eligibility requirements of the MRF can be found in the websites of the China Securities Regulatory Commission (CSRC) and the Securities and Futures Commission (SFC).
Benefits
- A safe and efficient channel for retail investors in Mainland to access overseas funds and retail investors in Hong Kong to access Mainland funds.
- A greater choice of mutual funds for portfolio diversification.
- Streamlined procedure to obtain authorisation for retail distribution in the other jurisdiction.
Related Information
- Please refer to Section 2 under Part V of the CMU Reference Manual on Reference Materials page
- More on MRF
