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[The brokerage research mentioned that the number of northbound mutual recognition funds has reached 39. Since 2023, the net subscription of northbound mutual recognition funds has shown a clear upward trend. As of the end of May, the cumulative net subscription amount of northbound mutual recognition funds reached 27.32 billion yuan.]

As Chinese investors' willingness to allocate globally increases, the quota of QDII (Qualified Domestic Institutional Investors) has been expanded again, but it is still tight. Another type of QD, QDLP (Qualified Domestic Limited Partner), is also being issued intensively, but the threshold is quite high and it is limited to high-net-worth individuals. In this context, institutions are eager to expand the scale of mutual recognition funds that are not restricted by QD quotas.

The scale of mutual recognition of funds is expected to be implemented

According to the First Financial reporter, several institutional sources said that the scale of mutual recognition of funds is expected to be implemented in the fourth quarter.

As early as June 14 this year, the CSRC issued the "Hong Kong Mutual Recognition Fund Management Regulations (Draft for Comments on the Revised Draft)", which mentioned that the proportion of foreign sales of mutual recognition funds will be relaxed from 50% to 80%. This means that as the subsequent revised draft is improved and officially released and implemented, the total scale of northbound mutual recognition funds is expected to continue to expand, and 80% of the funds raised by a fund registered and issued in Hong Kong can be raised from the mainland. In addition, another optimization direction is to allow the investment management functions of Hong Kong mutual recognition funds to be transferred to overseas asset management institutions in the same group as the manager.

Generally speaking, funds that meet the standards in the mainland and are sold in Hong Kong are called "southbound" funds, while public funds that meet the standards in Hong Kong and are sold in the mainland are called "northbound" funds. In the past two years, as interest rates in the mainland have fallen and overseas investment has become popular, "northbound" funds have been sought after.