The Financial Conduct Authority (FCA) and the Hong Kong Securities and Futures Commission (SFC) have inked a memorandum of understanding (MoU) for mutual recognition of funds.

Under the agreement, public funds in Hong Kong and retail funds in the UK can be distributed in each other’s jurisdiction.

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The agreement will cover multiple fund types such as equity, bond, mixed, feeder funds and funds of funds.

FCA CEO Andrew Bailey said: “We are very pleased to have agreed this framework, which paves the way to offering consumers greater choice and diversification in their investments.

“It reflects the UK’s commitment to open financial markets supported by effective regulation which delivers equivalent outcomes.”

Besides, the alliance will facilitate information-sharing, regular dialogue, and regulatory cooperation related to cross-border fund distribution. The MoU mandates investors to be treated fairly, irrespective of their jurisdiction.

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SFC CEO Ashley Alder said: “This new cooperation framework with the FCA will not only bring benefit to the asset management industries in the United Kingdom and Hong Kong, but also offer investors in both markets with more investment choices.

“Equally important, expanding the mutual recognition of funds framework is consistent with our strategic goal of positioning Hong Kong as an international asset management centre.”