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Existing funds

Charltons provides high impact advice to investment funds on all aspects of their on-going operations, including regulatory and compliance matters, and trading and investment of fund assets.

We advise investment funds across the full spectrum of asset classes, including listed stocks, fixed income and derivative securities, property, infrastructure, natural resources, emerging market private equity and venture capital, hedge funds and distressed debt.

We offer investment funds and fund managers a full range of services covering all aspects of on-going fund operations, including amendments to fund documentation (for example, a change in investment strategy) and additional investor subscriptions. Our downstream practice also includes transactional work as funds commence investment activities (such as M&A involving portfolio companies and financing rounds for portfolio companies), advice on redemptions and transfers of fund interests, fund restructuring, exits (including sales and initial public offerings of portfolio companies), advice on loan facilities (including revolving credit facilities and margin financing) and regulatory matters.

We advise SFC authorised investment funds on complying with post-authorisation requirements under Chapters 10 and 11 of the SFC’s Code on Unit Trusts and Mutual Funds. We also have experience advising on on-going obligations for “Chapter 21” investment companies listed on the Hong Kong Stock Exchange.

We also guide investment funds and managers through the SFO disclosure of interests requirements and potential issues under the SFC’s Takeovers Code arising from stake building in Hong Kong listed companies.

Charltons has experience of SFC authorised investment funds in Hong Kong and can offer legal advice for funds and fund managers.


Listing of investment funds 

Retail funds

SFC authorised investment funds can readily obtain a listing under Chapter 20 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”). Once the Securities and Futures Commission (“SFC”) has granted its “approval in principle”, a formal listing application can be submitted to the Hong Kong Stock Exchange (“Exchange”). The listing document which an applicant is required to submit to the Exchange must contain the disclosure document authorised by the SFC and other information relevant to the listing of the investment fund.

“Chapter 21 funds”

Closed-ended investment funds which have not been authorised by the SFC can be listed on the Exchange under Chapter 21 of the Listing Rules. The fund does not need to comply with the requirements of the Code on Unit Trust and Mutual Funds, but because it is not authorised by the SFC, it cannot be offered or marketed to the public in Hong Kong. A track record is not required but the managers must prove to the Exchange that they have the necessary expertise and experience. Such investment funds are listed on the basis that they will be marketed only to professional investors.

The principal requirements relating to Chapter 21 listed funds are that:

  • they cannot be offered to the Hong Kong public and must have a minimum of 300 shareholders on listing, all of whom must be “professional investors” as defined in Schedule 1 to the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (however, in practice, it may be possible on a case by case basis to apply for waiver to reduce it to 100 shareholders- HKEx Guidance Letter HKEx-GL17-10 at paragraph 5)
  • the minimum board lot size and minimum initial subscription size is HK$500,000;
  • on listing, no person may control 30% or more of the fund’s voting shares;
  • in the case of a newly formed fund, it cannot change  its investment objectives, policies and restrictions without shareholders’ consent for three years after its initial listing; and
  • the Exchange must be satisfied that the directors of the investment fund, its management company and/or investment adviser are competent to perform their functions in relation to the fund and that the executive management committee has satisfactory experience in the professional management of investments on behalf of third party investors.

Charltons has experience of SFC authorised investment funds in Hong Kong and can offer Hong Kong legal advice for funds.

SFC authorised investment funds

Investment funds

Legal advice for funds

Hong Kong legal advice for funds

Chapter 10 and 11 requirement compliance for SFC authorised investment funds

Legal advice for investment funds in Hong Kong

Hong Kong investment funds

Chapter 21 investment companies listed on Hong Kong Stock Exchange

Hong Kong Securities and Futures Commission SFC Takeovers Code

Chapter 20 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Listing Rules

Hong Kong Chapter 21 funds

SFC Code on Unit Trusts and Mutual Funds chapter 10 chapter 11
Investment fund definition
Authorised fund manager
Compare investment funds
Authorised unit trusts

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