The government is slated to relax a cap on funds that invest in Hong Kong-listed Chinese companies, raising the limit from 5 percent of total assets to 10 percent next month, local media reported.
But Financial Supervisory Commission (FSC) vice chairman Lu Daung-yen (
The FSC doesn't have the final say, he added.
Lu refused to comment on whether raising the cap to 10 percent is the government's policy direction.
Last month, FSC Chairman Kong Jaw-sheng (
He added that the FSC would take an active role and discuss the possibility with the council, and would support the relaxation.
In addition to the easing of the investment cap, local trust funds would also be allowed to begin sales in Hong Kong -- to raise capital from Hong Kong and Macau -- once both sides ink an agreement officially acknowledging each other's markets as being legal, according to a local media report.
The report added that Kong is expected to sign a memorandum of understanding with Andrew Sheng (
Kong, on his return from a low-profile visit to Hong Kong two weeks ago, confirmed that Sheng had agreed to attend the meeting.
Kong also hinted that there may be a window of opportunity for further cooperation between Hong Kong's and Taiwan's fund markets if Sheng successfully makes the trip, which is sure to be opposed by Chinese finance officials.
* The current rules restrict funds from investing more than 5 percent of total assets in Hong Kong-listed Chinese companies
* The limit may be raised to a 10 percent cap
* The FSC says the change requires the approval of the Mainland Affairs Council
* The FSC's head is expected to sign an agreement with the head of Hong Kong's Securities and Futures Commission next month
Local fund managers lauded the possible relaxation on Chinese investments, saying that it will help boost the nation's asset-management market, according to the report.
The report further quoted Invesco Taiwan Ltd (
Invesco previously terminated sales of four of its funds in Taiwan because of the 5 percent investment cap.