The fund management industry in Hong Kong is likely to get a shot in the arm, with money managers relishing the prospect of attracting more investors from mainland China following some tweaks to a cross-border trading scheme.

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Changes to the Mutual Fund Recognition (MFR) scheme will allow Hong Kong-based firms to sell more of their investment funds to mainland investors, according to the China Securities Regulatory Commission (CSRC). Fund managers outside Hong Kong will also be able to invest the funds for the investors, it added.

The changes, unveiled in mid-December and became effective on January 1, will enhance Hong Kong’s appeal as a gateway for global fund managers to serve the investment needs of mainland investors, according to the Hong Kong Investment Funds Association (HKIFA).

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“The relaxations will address two major pain points [in the industry],” CEO Sally Wong said. “They will greatly reinvigorate the scheme.”

The HKIFA has 106 members, including some of the world’s biggest fund houses like JPMorgan, Fidelity and Barings. The MFR scheme was launched in July 2015, paving the way for domestic investment funds to be sold in both jurisdictions.

Mainland investors ploughed 33.2 billion yuan (US$4.56 billion) into Hong Kong funds in the first 10 months of 2024, up from 12.4 billion yuan in the same period a year earlier, according to the State Administration of Foreign Exchange. At the same time, Hong Kong investors spent 86.6 million yuan to buy mainland fund products, down from 339 million yuan.