FEATURING Alternative Investment Management Association (AIMA) // Complyport (HK) Limited // Gibraltar Finance // Henley Business School // Hong Kong Exchanges and Clearing Limited (HKEx) // The Hongkong and Shanghai Banking Corporation Limited (HSBC) // Maybank Kim Eng Securities Pte Ltd // Maples Fund Services // Orangefield Group

WEEKHFMS P E C I A L R E P O R T

MAKING CONNECTIONS New Stock Connect allows for multi-market trading

INTERNATIONAL INVESTMENT EU & US investors are testing Asia’s potential

EDUCATION Greater industry knowledge prompts growth

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LONDONThird Floor, Thavies Inn House, 3-4 Holborn Circus, London, EC1N 2HAT +44 (0) 20 7832 6500

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he Hong Kong hedge fund industry continues to show extraordinary growth, with

the most recent SFC survey of Hong Kong’s hedge fund activities now indicating a locally managed AuM of US$120.9bn. Not only is this an increase of 39% from the previous SFC survey (2012), but it also propels the Hong Kong industry to well beyond its pre-crisis peak. Similarly, inflows during 2014 have pushed the global industry AuM to an all-time high, as investors look to our industry as a provider of downside protection and diversification.

Hedge funds have become part of the mainstream and earlier this year AIMA published a white paper entitled ‘The Way Ahead’ which revealed that 75% of global hedge fund assets now come from institutional investors, with one in four dollars derived from public and private pension funds. Hong Kong funds have been a beneficiary of a cyclical and structural shift, as this institutional capital has sought out Asian exposure, catalysed by recent macro developments in the region, such as Abenomics and China’s liberalisation reform. The pursuit of risk-adjusted return in Asia requires specialist expertise and global investors are committing more man-hours to familiarise themselves with Asian talent and building relationships with new fund launches earlier, in order to negotiate bespoke product requirements or simply secure capacity.

While the search for Asian exposure is not new per se, with 20 US$1bn-plus managers now based in Hong Kong, the extent to which local talent is able to satisfy institutional capacity demand is becoming self-fulfilling. Discussions purely centred on operational robustness have quietened, as Asian managers have been quick to effect best practice and Asia managers are pro-actively looking to become solution providers and long-term partners to a truly global client base.

Hong Kong managers are still inclined towards equity long-short, with a subtle increase in demand for long-bias products, as investors look to scale. For the longer term, AIMA continues to advocate an operating environment that encourages an even wider diversity of products and strategies, and one which is conducive to both investor choice

and the further development of Hong Kong's human talent.

The recent extension of Hong Kong’s offshore fund profit tax exemption to the private equity space shows a continued commitment to alternatives on the part of the Hong Kong authorities, and we hope augurs a more favourable environment for credit strategies over time. Similarly the creation of a Hong Kong-domiciled fund vehicle, proposed in the 2013 budget and championed by AIMA as early as 2009, would announce another exciting step in Hong Kong’s fund presence and provide a sizeable boost to asset management infrastructure and value-add services.

Indeed, Hong Kong has been open about its intention to position itself as a key Asian fund management centre and a ‘super-connector’ between mainland China and the rest of the world. Recent developments have so far been fast paced. Late last year, Hong Kong and mainland China markets combined forces for the introduction of Stock Connect – the roundtable focus feature on page 6 addresses this in more depth. More recently the launch of the Mutual Recognition of Funds scheme, while not immediately applicable to the hedge fund product, continues to illustrate a clear path towards freer capital flows and provide a further catalyst for the growth of Asian asset management.

All of this bodes well. The vision behind these initiatives, the speed with which they have been brought online, and the opportunities that they present, are game-changing; while for the Hong Kong hedge fund industry itself, there has been no better time to come of age.

TH O N G K O N G 2 0 1 5

Heide Blunt has two decades of experience specialising in the Asia-Pacific region, with both buy- and sell-side institutions at a senior level. She joined the Alternative Investment Management Association (AIMA) in May 2013 to head its Hong Kong Chapter as managing director. In 2014 Blunt assumed responsibility for AIMA’s Asia-Pacific activities and its offices in Hong Kong, Singapore, Japan and Australia

I N T R O D U C T I O N

REPORT EDITOR Drew Nicol T: +44 (0) 20 7832 6569 d.nicol@pageantmedia.com

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HEAD OF PRODUCTION Claudia Honerjager SUB-EDITORS Luke Tuchscherer, Mary Cooch, Alice Burton

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HFMWeek is published weekly by Pageant Media Ltd ISSN 1748-5894 Printed by The Manson Group © 2015 all rights reserved. No part of this publication may be reproduced or used without the prior permission from the publisher

4 H F M W E E K . CO M

H O N G K O N G 2 0 1 5 C O N T E N T S

ROUNDTABLE

BUILDING BRIDGESKevin Rideout of the Hong Kong Exchange, Jean-Paul Linschoten of HSBC, Phil Tye of the AIMA, and Catherine Law of Orangefield, sit down with HFMWeek to discuss the launch of Hong Kong-Shanghai Stock Connect

PRIME BROKERAGE

YOUR ASEAN PLATFORM FOR GLOBAL SOLUTIONSJeffrey Goh, managing director, Kenny Lo regional head of financial products and Ade Olopade head of prime service at Maybank Kim Eng Securities discuss the emerging opportunities they see in in the PB space

FINANCIAL SERVICES

NURTURING GROWTHEastern Fong, Maples Fund Services’ regional head of fund services, Asia, explains how Asia’s fund industry has evolved in the past year and how new sources of capital and investment vehicles are shaping the sector

COMPLIANCE AND REGULATION HOW SIGNIFICANT IS SIGNIFICANT?Stuart Somer takes a look at the securities and futures (Licensing and Registration Information) rules in Hong Kong

EDUCATION

OFFERING EXCELLENCESteve Bernstein, of SinoPac Solutions & Services, outlines the work done by Henley Business School to educate Asia’s industry professionals in all aspects of Hedge Fund setup to management

FUND ASSOCIATION

GIBRALTAR: DELIVERING EU SOLUTIONS FOR HONG KONG-BASED MANAGERS Philip Canessa of Gibraltar Finance outlines what the jurisdiction can offer Asian fund managers looking to raise capital in Europe

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H O N G K O N G 2 0 1 5

HFMWeek (HFM): Hong Kong–Shanghai Stock Connect offi cially launched in late 2014. What chal-lenges did you face in the creation of this scheme?Kevin Rideout (KR): When Stock Connect was offi -cially launched in late 2014, we knew we would probably have to do some fi ne-tuning. We thought it was bett er to get the programme up and running and then make some minor changes along the way than to spend a lot of time trying to fi gure out and address all of the issues that might come up.

Th e pre-trade checking and benefi cial ownership is-sues probably slowed the initial fund fl ows. We met those challenges by introducing the SPSA Model for pre-trade checking and engaging with Luxembourg and Ireland’s fund authorities. Both have now given greenlights. Despite these positive moves, we will continue to engage the investors and market participants to address their con-cerns over the scheme.

Phil Tye (PT): Th e hedge fund industry in general faced fewer challenges in implementing the scheme than the long-only com-munity. Once the broking com-munity established the trading infrastructure, hedge fund man-agers were able to plug into the Connect programme relatively simply. Most hedge funds were able to trade their mainland China exposure through derivatives writ-ten by their brokers rather than trading in ‘cash’ form and thus minimising the changes needed to system and operational fl ows. Th is mechanism also avoids many of the legal and operational issues, such as the pre-delivery of shares on the day before sale, questions over enforce-ability of shareholder rights as well as asset segregation, which have plagued those funds which cannot trade in derivative form.

Jean-Paul Linschoten ( JPL): Investors, custodians and brokers faced unique challenges in the lead up to the launch of Stock Connect – as can be expected when ac-cessing a foreign market via a local exchange. Th e diff er-ing exchanges ensured divergent holiday calendars, set-tlement cycles, clearing houses, tax and exchange levies,

and error rectifi cation procedures. Th is tested industry participants’ knowledge and expertise, so it came as no surprise that the initial review of the draft rules raised questions.

As many of the existing onshore A-share mechanics, already familiar to QFII/RQFII investors, found their way south, it became evident there were four main chal-lenges: pre-trade stock checking, non-delivery versus payment, same-day securities sett lement, and securities not being registered in a client’s name.

With our brokerage operating under a Th ird Party Clearing model, and with HSBC’s strength in Renminbi, we were quickly able to off er solutions to address a num-ber of these challenges. For example, our Custody Plus

off ering meant that investors were not required to pre-deliver shares or pre-fund Renminbi prior to ex-ecution, while our sub custodian enabled synthetic delivery versus payment.

HFM: What will the impact of this scheme be on the wider Asian hedge fund community? Catherine Law (CL): Stock Con-nect certainly opened up more ac-cess for smaller hedge fund man-agers to participate in the China A shares market, without having to seek for QFII/RQFII quotas, es-pecially since quota allocations oft en go to the larger AuM man-agers.

Stock Connect represents a major move in the opening up of capital markets in China. Th e in-frastructure linking the two mar-kets is likely to add momentum

to the long-term development of the Hong Kong capital market, and increase the att ractiveness of Hong Kong as a listing venue of choice for international companies tar-geting the mainland market.

With the addition of Shenzhen, I believe it would draw even more foreign investors than Shanghai given the former’s focus on small-cap fi rms within the technology and consumer sectors, which are popular industries for Asian hedge funds. It will be interesting to see which of Shenzhen’s 1,500 stocks would be allowed into the new stock market, ultimately, giving investors more choices of stocks.

MOST HEDGE FUNDS WERE ABLE TO TRADE

THEIR MAINLAND CHINA EXPOSURE THROUGH

DERIVATIVES WRITTEN BY THEIR BROKERS RATHER

THAN TRADING IN‘CASH’ FORM

”

KEVIN RIDEOUT OF THE HONG KONG EXCHANGE, JEAN-PAUL LINSCHOTEN OF HSBC, PHIL TYEOF THE AIMA, AND CATHERINE LAW OF ORANGEFIELD, SIT DOWN WITH HFMWEEK

TO DISCUSS THE LAUNCH OF HONG KONG-SHANGHAI STOCK CONNECT

BUILDING BRIDGES

Kevin Rideoutjoined the HKEx in April 2015 as head of business development in global markets division. He is responsible for the division’s business development and marketing teams. Rideout joined HKEx from Citigroup, where he served most recently as head of wholesale execution services, Asia and chief spokesman on the implementation of Stock Connect.

Jean-Paul Linschotenjoined HSBC in 2012, as director, prime finance sales, and was instrumental in defining, implementing and marketing the bank’s Stock Connect cross-product proposition. In his current role, Linschoten is responsible for prime and delta one mandate origination, equity finance sales, stock loan, and managing client relationships across all businesses.

R O U N D TA B L E

H F M W E E K . CO M 7

JPL: However, although the impact will continue to be significant, very few hedge funds received an A-share quota (QFII/RQFII) and were largely forced to gain A-share exposure via equity swaps where there were signifi-cant liquidity constraints – as evidenced in the lead up to the launch of Stock Connect. These constraints, coupled with the costs associated with a scarce resource, limited the assets under management deployed into A-shares.

Stock Connect now allows hedge funds to directly ac-cess the A-share market for the first time with relatively unlimited constraints. The constraints are ‘relatively un-limited’ as there is currently a daily aggregate quota that we expect to be raised as soon as it is fully utilised.

PT: Stock Connect has already had a significant effect on the Asian hedge fund community by introducing easier and cheaper access to the Shanghai Exchange. However, while volumes have grown steadily since implementa-tion, daily turnover is still a relatively small percentage of total exchange turnover.

Apart from the issues mentioned above, the broking industry still has some way to go to increase research cov-erage of Chinese stocks, and this will be a very important factor for the ultimate success of the scheme in the wider Asian hedge fund community.

HFM (HFM): How important is it that China accept-ed EU equivalent features when creating the frame-work of this Stock Connect?CL: The recent approval from the Central Bank of Ire-land, permitting Irish authorised investment funds to acquire China A shares through Stock Connect and with Luxembourg regulator allowing a fast-track application for the updating of prospectuses to invest in A shares,

these are signs that China intends to attract interest from many European funds to consider a higher allocation to China stocks in their investment strategy.

However, very few foreign funds received the approval to use Stock Connect earlier in the year. The problem they face is the difference between international practice and Chinese practice. For example, the understanding of beneficial ownership under the scheme, liquidity and market reliability, which in the face of recent Chinese in-tervention in the A-share market, isn’t a good thing

HFM: Looking forward, what new strategies and fund structures should be incorporated? What must be included for Stock Connect to remain globally rel-evant? KR: Under the joint oversight of the regulators in Hong Kong and mainland China, capital flows from the main-land and international markets are able to come together and interact with each other in a ‘Mutual Market’ that they access through a market they are very familiar with. For mainland investors, it is the Shanghai Stock Ex-change. For investors from Hong Kong and overseas, it is Hong Kong’s stock market.

CL: For Stock Connect to remain globally relevant, it must be able to allow market accessibility, capital mobili-ty and reduction in operational complexity. It should also allow for overseas investors to participate in IPO, place-ments, and other corporate action deals.

Depending on investors’ sentiment, I believe there will be interest to structure a fund that provides exposure to both A- and H-shares at the same time and at a lower cost. Stock Connect ETFs could be an appealing way of accessing the trading link, given that most retail investors

The opening of Hong Kong-Shanghai Stock Connect, 17 November 2014, Hong Kong

8 H F M W E E K . CO M

H O N G K O N G 2 0 1 5

would not be able to invest directly, given the high capital requirement.

PT: China continues to be the focus of managers trad-ing long-short, relative value and event driven strategies, although there is a growing focus on quantitative strat-egies, particularly on-shore in the mainland. Managers’ ability to express their short strat-egies is still constrained and this will be an ongoing area of interest as the market institutionalises. In addition, diversity and liquidity are key drivers for our industry and it will be important therefore to see the inclusion of more Chi-nese stocks in the programme over time as well as a relaxation of in-vestment quotas.

JPL: Given the existence of dif-ferent share classes (H, A, B and ADR’s) we expect more relative value equity strategies emerging beyond those of the traditional Hong Kong players who have been active for some time. We are advising many overseas funds on the best ways to access the A-share market (QFII/RQFII/Stock Connect/swaps) and the idiosyn-crasies in relation to cost, liquid-ity, and operational risk. We also anticipate more fi xed income funds emerging next year as the onshore bond

market develops and new procedures and protocols are established along similar lines to what many foreign in-vestors are already used to.

HFM: What new developments and expansion would you like to see the scheme focus on? What’s already in the pipeline?

JPL: Investors are eagerly waiting for Shenzhen Connect to launch, hopefully sometime this year. Ad-ditionally, there is signifi cant in-terest in hedging products such as equity index futures and options.

PT: We also look forward to the inclusion of Shenzhen in the near future, as most of the A-shares will then be included in the Connect programme. Shenzhen listings include many of the younger, ar-guably more dynamic, companies particularly in the new technol-ogy and manufacturing industries. While the average company listed in Shenzhen is capitalised at less than half that of a Shanghai listing, there are far more listings in the former. Th is provides potentially very interesting opportunities for the hedge fund community, as a large and diverse stock pool allows

managers to achieve an appropriate level of portfolio di-versifi cation.

WE ALSO LOOK FORWARD TO THE INCLUSION OF

SHENZHEN IN THE NEAR FUTURE, AS MOST OF THE A-SHARES WILL THEN BE

INCLUDED IN THE CONNECT PROGRAMME

”

Catherine Lawis the senior business development manager at Orangefield Hong Kong. She has 15 years of experience in the financial industry gained at recognized financial institutions in Canada and Hong Kong. Catherine brings a wealth of operational knowledge in the asset management and alternative investment fund space, including private equity, real estate, hedge funds and fund of funds.

Phil Tyewas elected chairman of the Hong Kong National Group of The Alternative Investment Management Association Limited (AIMA) in September 2012. He has been involved in the Asian hedge fund industry for a number of years. Tye established HFL Advisors Limited to provide consultancy services to the alternative investment management industry and is a director and advisor to various hedge funds.

R O U N D TA B L E

H F M W E E K . CO M 9

Following this, we would like to see derivatives eligible for trading through a mutual market access mechanism, together with fixed income instruments and commodi-ties. It is important to realise that the underlying strat-egies traded by Asian hedge funds cover all major asset classes; and therefore the industry as a whole is interest-ed in seeing access to, and liquidity within, the Chinese markets improve with these developments. Encouraging the institutional flows to the markets to continue, along-side the implementation of robust international corpo-rate governance standards, will ensure the ultimate suc-cess of these programmes.

KR: This model has the potential to be extended to other products and asset classes, including Exchange Traded Funds, equity derivatives, commodities, fixed income and currencies. The model provides a framework for gradual and orderly opening of the mainland markets, as well as gradual and orderly expansion of mainland inves-tors’ access to markets outside the mainland. And with all Stock Connect participants using RMB, the Mutual Market helps move the internationalisation of mainland China’s currency forward.

CL: Investors and managers would like to see the plat-form be broadened in terms of the quotas, markets and securities covered. I would also like to see the following:

• Clearer tax policy of business tax on income arising from the price difference of trading shares on SSE or HKEx derived by individual investors.

• Increased short selling turnover and maximum num-ber of shares available for short-selling (quantity and price restrictions)

• Making short selling of A shares available to overseas investors and HK investors.

• Other product types such as B shares, ETFs, bonds and other securities are not included.

• Beneficial ownership; facilitate investors to track their stock holdings/pre-trade checking before deliv-ery of stocks to their brokers for execution.

HFM: How does Hong Kong move from Stock Con-nect to a more comprehensive Mutual Market en-compassing other products and asset classes?KR: We hope Hong Kong-Shanghai Stock Connect is really just the opening act for the Mutual Market. As pre-viously mentioned we’ve been working on a similar link with the Shenzhen Stock Exchange and are now seeking regulatory approval. We plan to explore other products and asset classes in the future in full co-operation with our clients.

HFM: What new opportunities does Stock Connect present for you and your clients? CL: Stock Connect has opened up more opportunities for our clients to explore more trading strategies as access to Chinese stocks increases. For hedge funds, there are more relative value trading strategies implemented since the be-ginning of Stock Connect and, for venture capital funds, Stock Connect allows mainland Chinese companies to list in Hong Kong for international exposure, granting VC funds invested in Chinese companies more exit opportu-nities via IPO in Hong Kong. Also, as we see internation-alisation of the Renminbi and the gradual opening up of the PRC’s capital account, giving Asian managers more opportunities to raise funds outside of Asia.

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P R I M E B R O K E R A G E

H F M W E E K . CO M 11

H O N G K O N G 2 0 1 5

As major banks retreat from the prime brokerage space as a result of new Basel III and AIFMD obligations, the shifting trend to boutique prime brokers for alter-native market access has picked up pace in the past 12 months.

Maybank Kim Eng’s (MKE) prime services, part of ASEAN’s fourth largest banking group, is offering its new prime brokerage solutions to hedge funds, propri-etary traders and family offices. MKE provides a full suite prime services plat-form, covering securities financing, fixed income, synthetic equities and se-curities lending solutions.

HFMWeek (HFM): What opportunities are there now in the prime broker-age space that didn’t exist a few years ago?Jeff rey Goh ( JG): Higher capital requirements and tighter regulations have raised the funding costs for prime brokers, prompting some to become more selec-tive in choosing clients. Th e off -boarding of smaller sized hedge funds has created an opportunity for boutique platforms. Th ere is a big gap in the market that we feel is underserved. If you start a fund with between US$10m and US$20m, it is diffi cult to fi nd a bulge bracket prime broker that will on-board you. Th is is where we step in.

HFM: How is Maybank looking to capitalise on these?Kenny Lo: Because we are an ASEAN bank with strong credit ratings, clients can take greater comfort with our counterparty risk. We are uniquely positioned to fi ll the void in the underserved segment. MKE’s prime services started in 2014 by off ering cash and synthetic equities. In 2015, securities borrowing and lending and fi xed in-

IF YOU START A FUND WITH BETWEEN US$10M AND US$20M, IT IS DIFFICULT TO FIND A BULGE BRACKET PRIME BROKER THATWILL ON-BOARD YOU. THIS IS

WHERE WE STEP IN

”

come fi nancing were added to its off ering stable. MKE’s prime services have on-boarded clients with assets under management of between US$5m and US$100m to date and interest predominantly coming from asset managers, traders hoping to transition to hedge funds, family offi ces and some HNWIs.

HFM: How does Maybank diff erentiate itself?JG: MKE’s regional equities research franchise helmed by Sadiq Currimbhoy, global strategist, and Tan Sin Mui,

an institutional investor-rated analyst, provide com-prehensive insights into ASEAN’s corporates. Th e platform provides market access solutions combined with personalised service levels. Th e platform off ers timely market access to wealthy individuals who want to stay on top of their investment portfolios.

Th e backdrop of private banking is wealth manage-ment and advisory ser-vices. Th e active trader wants speedy market access and private banks gener-ally don’t provide that. All these, wrapped around a

core principle of providing cost-eff ective solutions.

HFM: What are the challenges of fi lling the gap left by the banks in the prime brokerage space, and what is your prediction for how the space will evolve in the future?Ade Olopade: We don’t believe banks are retreating completely from this space instead they are re-pricing the cost of balance sheet utilisation and the asset mix they are fi nancing.

As ASEAN’s fi rst boutique prime broker, we believe this realignment will result in greater intermediation by boutique prime brokers like ourselves.

Ade Olopadeis head of prime service at Maybank Kim Eng Securities Pte Ltd.

Kenny Lois regional head of financial products at Maybank Kim Eng Securities Pte Ltd.

Jeffrey Gohis managing director at Maybank Kim Eng Securities Pte Ltd.

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F I N A N C I A L S E R V I C E S

H F M W E E K . CO M 13

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HFMWeek (HFM): How has Asia’s hedge fund mar-ket developed in the past 12 months? What emerging trends have you noticed?Eastern Fong (EF): Th e hedge fund market in Asia has primarily focused on activities into and out of China. Th at doesn’t mean the other markets, such as Hong Kong, Japan, Singapore and Korea, don’t have their own activity but China has simply taken over most of the mar-ket’s focus.

In terms of emerging trends, one of the main devel-opments we’ve seen is that the onshore domestic fund managers, also known as sunshine fund managers, have begun to set up off shore funds.

Th ere are several reasons behind this. Firstly, a drive by Chinese investors who are demanding diversifi cation to mitigate some of the risks associated with China’s stock market’s volatility. Additionally, sophisticated investors want their investments protected by more robust regu-lations in domiciles where the investment managers are regulated. In this regard, I have seen more fund managers licensed in Hong Kong.

Institutional investors from outside of Asia are in-creasingly seeking out local managers with exemplary track records and great pedigrees. Th e keys for Chinese managers to att ract these investors are being physically present in the markets, being regulated by recognised en-

EASTERN FONG, MAPLES FUND SERVICES’ REGIONAL HEAD OF FUND SERVICES, ASIA, EXPLAINSHOW ASIA’S FUND INDUSTRY HAS EVOLVED IN THE PAST YEAR AND HOW NEW SOURCES

OF CAPITAL AND INVESTMENT VEHICLES ARE SHAPING THE SECTOR

Eastern Fongis the regional head of fund services – Asia at MaplesFS. He provides fund administration services to a wide range of investment funds including unit trusts, corporate funds, umbrella funds, segregated portfolio company and limited partnership structures.

NURTURING GROWTH

F I N A N C I A L S E R V I C E S

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H O N G K O N G 2 0 1 5

tities and demonstrating a proven track record for sound long-term investment.

These investors are coming from all areas of the world and all want to explore Asia’s potential, but may be more averse to areas which are perceived to be lacking clarity and certainty in the regulatory framework.

The second trend is continued growth in the wealth management industry. China’s economy has rapidly grown over the past five or six years. This has resulted in a significant accumulation of wealth. New channels for offshore investment op-tions have been created to accommodate this new capital stream. An example of this is the Qualified Domestic Investment Enterprise scheme (QDIE) which allows mainland Chinese investors to tap into a wider variety of foreign asset classes.

A final trend we have noticed is that the Chinese market is increasingly driven by policy and the Chi-nese government is under international pressure to float the renminbi and to further open up the capi-tal market. The Shanghai-Hong Kong Stock Con-nect and the Mutual Recognition of Funds (MRF) are two recent examples of this. HFM: What are the drivers behind the growth in offshore funds from China and where is the off-shore domicile of choice for Asian investors? EF: The Cayman Islands is by far the domicile of choice for Asian investors looking to send their capital offshore, in part because it is an established and well-regulated jurisdiction. The Cayman Islands Monetary Authority (CIMA) has recently issued guidance on corporate gov-ernance and it has also demonstrated close cooperation with the UK and US governments on Fatca.

The Hong Kong regulatory regime dictates that the manager itself is the focus of Hong Kong’s regulation, as opposed to the fund. Managers must be licensed to market themselves in Hong Kong, but the fund can be anywhere. Therefore, it’s important to invest with a manager that meets these standards and also provides a competitive offering for capital returns.

HFM: What is the impact of the launch of the Shanghai-Hong Kong Stock Connect? EF: Since its launch there have been high expec-tations for capital to move south from China to Hong Kong. These initial expectations haven’t been fully realised yet, but the industry expects to see continued growth.

The first impact we have seen is that, through the Stock Connect, investors are able to access the market directly, which means the qualified foreign institutional investor (QFII) channel is no longer as relevant because it’s more expensive. This channel won’t disappear entirely, as it’s still a valid option for institutional investors, but indi-vidual investors may be more inclined to leverage the Stock Connect for direct market access.

Recent market volatility, however, has caused some foreign investors to scale back and we have yet to see the full impact of the Stock Connect under nor-

mal market conditions. The expected developments and expansions of this system, such as the inclusion of Shenz-hen, have also been delayed until things settle down, so it

will be some time before we see its true impact.

HFM: Asia is one of the regions seeing the highest growth in the number of ultra-high-net-worth investors (UHNWIs). How has this affected the fund market and what in-vestment trends are you seeing from this emerging demographic?EF: Wealth management firms often use Cay-man Islands structures to create segregated port-folio companies, due to their flexibility. Our cli-ents have grown significantly and have launched multiple products in a short time period because they have ultra-high-net-worth clients (typically Chinese) and access to their capital. By pooling this capital together through the wealth man-ager, investors have access to the larger institu-tional firms and the benefits they can provide.

We see capital from the East using this plat-form to meet the investment opportunities in the West. This is also a growing trend for enti-ties, such as insurance companies and wealth

management companies that are looking for stable risk-adjusted returns for their investors.

HFM: What are your expectations for future develop-ments in the industry and how is MaplesFS looking to take advantage of the opportunities out there? EF: To be successful, we need to have the patience to hold the hand of investors through the set up and launch process, particularly in China. In our experience, clients have been very good traders or managers but are less well versed in how to actually set up a hedge fund; or on the back and middle office processes. Additionally, having a command of the native language helps, so that you can

explain the benefits of the various structures to new managers and help fill the gaps in their knowl-edge.

We at MaplesFS view the market as an eco-system, of which we are only one part. You have to work with the other players in this eco-system in order to provide a full and effective service to start-up managers in Asia. We’ve seen managers we’ve advised grow dramatically, from as little as US$30m to upwards of US$200m, within a very short period of time, by taking on our advice and learning from those who have been through the process many times before.

The key differentiator between launches now and 12 months ago is the quality of the managers. Funds are launching with larger AuM and there is still market appetite and potential to see this grow further.

There will also continue to be a need for both emerging and established funds to seek advice on how to deal with regulatory changes, in and outside of Asia. MaplesFS is very well placed to provide this expertise and we will continue to play our part in

nurturing the market’s growth for the foreseeable future.

WE’VE SEEN MANAGERS WE’VE ADVISED GROW

DRAMATICALLY, FROM AS LITTLE AS US$30M TO

UPWARDS OF US$200M, WITHIN A VERY SHORT

PERIOD OF TIME

”

THE HONG KONG REGULATORY REGIME DICTATES THAT THE

MANAGER ITSELF IS THE FOCUS OF HONG KONG’S REGULATION, AS OPPOSED

TO THE FUND

”

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1 6 H F M W E E K . CO M

H O N G K O N G 2 0 1 5

Several distinct pieces of legislation together comprise the Securities and Futures Ordi-nance (SFO). One such item that receives litt le notice from Hong Kong managers is the Securities and Futures (Licensing and Regis-tration Information) Rules (Cap. 571S) (the

Ordinance). Th e Ordinance sets forth the requirements pursuant to which prospective and current SFC licensees (both individual and corporate) are required to satisfy the Securities and Futures Commission’s (SFC) requirement to provide certain material information about themselves, both initially upon licensing as well as post-licensing in respect of certain prescribed changes. For the most part this Ordinance has, since enactment in April 2003, re-ceived litt le att ention from the SFC, apart from ensuring: (i) a prospective licensed corporations’ compliance with the requirement to provide certain elemental information about the fi rm and its responsible offi cers, shareholders, and directors in connection with the initial licensing ap-plication; and (ii) certain ongoing requirements to keep the SFC advised of material changes to the information previously provided. Recently, however, the SFC appears to increasingly require compliance with certain other sec-tions of the Ordinance previously overlooked by the SFC and managers.

Th e Ordinance functions thusly: schedule 1, part 1 provides for certain items of information termed ‘basic information’ (For example, (i) in relation to an individual: name, place and date of birth, passport details and contact information; and (ii) in relation to a corporation: name; date and place of incorpora-tion and contact informa-tion), which, if changed, requires a licensed corpora-tion to advise the SFC with-in seven days.

Similarly, schedule 1, part 2 provides for information termed ‘relevant informa-tion’ (for example, informa-tion regarding a person or company being: convicted or charged with any crimi-nal off ence; subject to any disciplinary action or inves-tigation by regulatory body, or subject to any court or-der for fraud, dishonesty, or misfeasance; or engagement in any judicial proceedings)

which must be advised to the SFC within seven days. Cer-tain elements of this information are merely subject to a disclosure requirement, whereas others involve a two-step process with fi rst a request for approval for the change, and thereaft er, following granting of approval by the SFC, formal notifi cation by the licensed corporation that the change has taken eff ect (such as, changes in a responsible offi cer, corporate director, complaints offi cer, emergency contact person, or their particulars).

In the ordinary case, managers’ compliance with this Ordinance has been generally good. Incidences of non-compliance most commonly seen arise in the context of large multinational groups having a Hong Kong offi ce which is held by several upstream layers of corporates or a limited partnership, corporate shareholder and direc-torship at upper levels. Th e issue arises when changes in up-stream companies are not communicated down to the Hong Kong operating level in suffi cient time to permit the Hong Kong licensed corporation to report within the seven-day window, or at all.

In the context of smaller Hong Kong companies with no substantial overseas corporate shareholding, incidences of non-compliance typically arise from a lack of internal training given to fi rms’ licensed representatives who may not be aware of the SFC reporting implications of certain changes in their personal details.

INTERPRETATION OF PRINCIPLES-BASED REGULATION Since its enactment in 2003, the SFC has not considered with any depth items 8 and 9 of schedule 1, part 1, apart

from their review at the time of licensed corpora-tions’ application, namely items relating to the nature of the licensed corpora-tion’s business and service off ering. Recently, however, these elements have re-ceived new SFC att ention, and consequently licensed corporations’ compliance is increasingly becoming the subject of regulatory scru-tiny. As a result, changes to a licensed corporation’s business activities will re-quire careful consideration of their implications for the fi rm’s compliance with the Ordinance.

THE SFC TAKES THE VIEW THAT THE CONTINUED DEVELOPMENT IN THE HONG KONG FINANCIAL SERVICE

INDUSTRY MEANS FUTURE GROWTH WILL RESULT MORE FROM LARGE OVERSEAS MANAGERS RATHER

THAN NEW START-UPS

”

Stuart Somer is a principal and founder of Complyport Hong Kong, which provides regulatory and compliance advisory services to the Asian offices of multi-jurisdiction fund managers and institutional securities brokers. He attended Vanderbilt University in the US, holds a JD and MBA, and is a qualified lawyer.

STUART SOMER TAKES A LOOK AT THE SECURITIES AND FUTURES (LICENSING AND REGISTRATION INFORMATION) RULES IN HONG KONG

HOW SIGNIFICANT IS SIGNIFICANT?

C O M P L I A N C E A N D R E G U L AT I O N

H F M W E E K . CO M 17

In Hong Kong, the SFC’s interpretation and application of the provisions is generally principles-based. In brief, principles-based regulation uses a broad set of principles of conduct set out by a regulator, which leaves regulated persons and firms to determine how to most appropriately implement them. This differs from rules-based regulation, which leaves little discretion to the regulated subjects and requires the regulator to set out a more comprehensive body of governing rules. The latter, which consists of is-suance of detailed rules for prescribing how outcomes are to be achieved, underpins the financial regulation of other jurisdictions, like the United States.

Principles-based regulation is more efficient for regula-tors and governments, produces fewer pages of legislation requiring legal review and analysis. However, there are certain hazards for the regulated subjects in regard to out-comes which must, by necessity, be derived from a system of rules which is inherently vague, as the operation of such regulations permits each regulated firm to adopt its own procedures for achieving the prescribed result.

A cursory review of a principles-based body of law such as the SFO (and the SFC’s various codes and guidelines adopting the SFO requirements) reveals generous use of qualifying words which are not easily defined in an abso-lute sense but only with respect to prevailing associated circumstances, which are frequently fact driven, for ex-ample, words such as substantial, significant, reasonably, and materially. While the Ordinance, and to a lesser extent many other elements of the SFC, has remained unchanged since enactment in 2003, the SFC appears to have altered its interpretation of its requirements for the licensed cor-poration’s compliance. It now attaches a different meaning to the words employed in some of its provisions. There are a number of reasons for this changed interpretation, but generally all they arise as a result of the changed global fi-nancial regulations since 2008, and regulators’ attendant changed view of the importance of financial services com-panies’ compliance therewith. Paralleling this is the in-creasing scrutiny on financial services firms’ commitment to anti-money laundering, counterterrorist financing and schemes to facilitate tax avoidance.

RELEVANT PROVISIONSWithin the Ordinance, the SFC has changed its interpreta-tion of a licensed corporation’s ‘proper compliance’ with the provisions of items 8 and 9 of schedule 1, part 1 relating to ongoing disclosure of changes in its business. Changes to the business involving, for example, the nature of the busi-ness and types of services provided, or changes to its inter-nal controls, organisational structure, contingency plans, and related matters are now required to be reported.

The ambiguity in interpreting this requirement arises be-cause the Ordinance demands notification of such changes which are ‘significant’. SFC Guidance issued on 11 May 2015 (Circular to Intermediaries regarding Compliance with Notification Requirements), as well as recent regula-tory inquiries received by some licensed corporations, indi-cate a gradual shift by the SFC to broadening of the scope of its interpretation ‘significant’ for purposes of the Ordi-nance. Of late we note increasingly that the SFC now seeks to receive advice on important, but certainly less significant changes to the business, such as internal reorganisation

of operating units (such as, risk, operations and trading), amendments to management and operations involving un-regulated middle office functions (such as changes in chief risk officer and chief operating officer) and other business changes (launch of additional funds or establishment of new managed accounts, and establishment of overseas subsidiar-ies and joint ventures, for example).

RECOMMENDATIONThe SFC takes the view that the continued development in the Hong Kong financial service industry means future growth will result more from large overseas managers es-tablishing Hong Kong branch offices, rather than organi-cally as a result of new start-ups. Given the complexity of the ownership of the former, certain corporate changes involving upstream parent companies may create SFC reporting obligations under the Ordinance for the Hong Kong entity. The SFC also takes the view that qualitative internal changes to all managers’ operations now fall sub-ject to the Ordinance’s reporting requirement.

As a result we anticipate that future SFC on-site visits will now include a review of subsequent changes within the licensed corporation in respect of both the above items. In the worst case the SFC could, prior to an on-site visit, review the firm’s initial licensing business plan written some three to six years previously, and compare the con-tents against the manager’s current ownership structure and operational resources. Such comparison could theo-retically provide the SFC with a distinct checklist of items of which the licensed corporation failed to comply with the reporting requirements of the Ordinance. We therefore suggest that all managers carefully review both their own-ership structure and operational facilities and resources and advise the SFC of any material changes to both which have taken place subsequent to their initial licensing date. Given ambiguity associated with the interpretation of the word ‘significant’, it is suggested that managers err on the side of caution and adopt the SFC’s broader interpretation of its meaning.

1 8 H F M W E E K . CO M

H O N G K O N G 2 0 1 5

HFMWeek (HFM): What is the relationship between SinoPac Solutions and Henley Business School and why did you personally get involved in the scheme? Steve Bernstein (SB): As CEO of SinoPac Solutions, a Hong Kong-based fund administrator, I am advising and sponsoring Henley for the fi rst hedge fund certifi cation program run out of Hong Kong. I took on this project because we have seen a real lack of people in Asia that have a well-rounded understanding of the hedge fund space.

Th ere are many people, such as prime brokers, fund administra-tors, compliance offi cers and law-yers that touch upon the space but most only know about their own specifi c area of expertise. Off shore lawyers, for example, will have a sound grasp of off shore law but will know litt le about capital rais-ing. Cap intro people know that area but not about the technol-ogy infrastructure behind a fund, and so forth. Th e goal of the Henley class is to off er these professionals an opportunity to discover a much broader overview of how all the pieces fi t together and in doing so become much bett er at their job.

HFM: Who is this course aimed it? SB: All our students will have a few years of industry ex-perience. So far the people who signed up fi t into a four

categories. Firstly, people who ser-vice hedge funds, such as lawyers and compliance offi cers.

Secondly, people who wish to move from the sell-side to the buy-side. Th irdly, people who plan to start their own hedge fund and may know how to trade but don’t have an understanding of the back offi ce and accounting func-tions. Finally, it’s people within the industry looking to move into a COO-type role. All these peo-ple, whether they are looking to move into a diff erent sector or not will benefi t hugely from gaining a more holistic view of the hedge fund space and be much more eff ective in their own role when they’re able to bett er understand the responsibilities and burdens of their colleagues and business partners.

HFM: How would you describe the teaching style of this course? SB: Th ere’re no ‘professional teachers’ or academics

THE GOAL OF THE HENLEY CLASS IS TO OFFER PROFESSIONALS AN

OPPORTUNITY TO DISCOVER A MUCH BROADER

OVERVIEW OF HOW ALL THE PIECES FIT TOGETHER

”

STEVE BERNSTEIN, OF SINOPAC SOLUTIONS & SERVICES, OUTLINES THE WORK DONE BY HENLEY BUSINESS SCHOOL TO EDUCATE ASIA’S INDUSTRY PROFESSIONALS IN ALL ASPECTS OF HEDGE FUND SETUP TO MANAGEMENT

Steve Bernsteinis chief executive officer of SinoPac Solutions and Services based in Hong Kong. The company offers portfolio managers a comprehensive fund administration andsupport platform.

OFFERING EXCELLENCE

E D U C AT I O N

H F M W E E K . CO M 19

involved. All the tutors are active industry figures who specialise in the area they teach. We have about 20 to 30 tutors, mentors, advisers and guest speakers that will in-struct our 25 students on the nine modules that make up the course. These modules include: • Business set up & fund administration • Markets & trading • Legal, regulatory & compliance • Tax & audit • Ethics & corporate governance• Prime services • Portfolio management • Capital introduction • Risk management

The teaching style focuses on a hands-on, method-based approach instructed by people who are personally involved each aspect of the industry. Furthermore, there is also a big emphasis on networking. As previously mentioned, a lot the students will already be in the hedge fund space and will be able to mix with each other as well as the tutors and advisors to make the most of the experience.

The course is six-months, with on-site classes one week-end a month and online learning in-between. This means our students can continue to work while they learn.

HFM: Which specific aspects of the hedge fund space do industry professionals struggle with most? SB: There are a few areas we have found to regularly cause problems, but the main area is understanding the regularly changing regulation than is currently being in-troduced. AIFMD in Europe, Fatca in the US as well as local jurisdictional issues all cause problems for even ex-perienced industry professionals.

For Asia specifically, one of the problems we have seen is that most funds are considered small to medium in size on a global scale. Therefore the cap intro section of the course is important as the industry knowledge isn’t as developed.

Technology is another fast-moving area of the indus-try where people can get lost. Which portfolio manage-ment system, order management system and risk man-agement system is best for your fund? Which is the most competitive in an environment of rising costs? Being able to really understand your own infrastructure needs will greatly help reduce your overall costs and manage your business better.

HFM: How well recognised is this qualification, both within Asia and in the wider hedge fund community? SB: We’re currently speaking to industry bodies such as AIMA, CAIA and the CFA, where they will become edu-cational partners in the program. We already have a long list of distinguished industry partners such as Eureka-hedge, Harneys, Cordium, SinoPac Solutions and HM Government of Gibraltar.

The class, although based in Hong Kong, will largely not be Hong Kong specific in its teaching. We want a course that applies to all jurisdictions, including the US and Europe.

We are developing plans to roll out the program in other cities including Beijing, Shanghai and Singapore to start.

HFM: How would you define Asia’s service provider industry in terms of sophistication and development?SB: The fund industry in Asia is much younger than say the US or Europe. There is a huge opportunity for catch-ing up across the region. We’re advising governments and regulators on how best to do this. Hong Kong for example is probably 10 years behind the West in terms of industry development which includes the amount of capital managed in the region as well as qualified profes-sionals. A huge part of this catch-up effort is educating people, which is where Henley comes in. There are some existing courses that do one-off classes but this is the first course that covers the full spectrum of the industry from setup to management.

We’re already seeing a lot of local companies entering the space and competing with the foreign asset managers from Europe and the US. Currently, 80% of the money invested in Asia comes from the West, but that’s chang-ing as China opens up and invests in Asia as opposed to going abroad. A lot of family offices particularly would much prefer to keep money in Asia if the investment op-portunities are competitive, which they increasingly are. We hope to provide the region with highly-trained pro-fessionals who can help with the development of Asia’s fund industry in the future.

ABOUT HENLEY BUSINESS SCHOOL

HENLEY BUSINESS SCHOOL Founded in 1945, Henley was the first business school in the UK . It stands among an elite group of business schools, ranking within the top 1% worldwide, and one of just 66 business schools in the world with triple accreditation. Henley is truly international, delivering EMBA programs in 10 locations globally

INTERNATIONAL CAPITAL MARKETS ASSOCIATION CENTREThe ICMA Centre was Europe’s first active collaboration between the securities industry and a business school’s finance department founded over 20 years ago. The Centre was one of the first to be recognised as a Chartered Institute of Securities and Investment (CISI) Centre of Excellence, is a CFA Program Partner, and was the first UK school to submit a qualification for recognition by the Financial Services Skills Council (FSSC)

ASSESSMENTIndividual multiple-choice assessment and a final group project to simulate setting up their own hedge fund and fund management company. Candidates will be required to develop a business plan, pitch book , create an investment strategy, choose vendors, counterparties and present this to a panel of hedge fund experts in Asia, including Paul Smith, President and CEO of the CFA Institute

ADMISSIONS CRITERIA AND TUITION FEE• A good bachelor degree with at least three years’ relevant

experience in financial services• Application limited to 25 qualified candidates, first-come-

first-served• HK$80,000 (tax deductible for Hong Kong taxpayers)• This course will count towards professional CPT hours.

2 0 H F M W E E K . CO M

H O N G K O N G 2 0 1 5

Gibraltar is a self-governing and self-fi nanc-ing parliamentary democracy within the European Union (EU). A British overseas territory, Gibraltar’s economy is prosperous and highly-diversifi ed including fi nancial services, egaming, shipping and tourism.

Given its status within the EU, Gibraltar-licensed banks, investment services fi rms, Ucits, insurance companies, re-insurance companies and insurance mediation fi rms bene-fi t from access to the single European market and therefore a potential client base of more than 500 million people.

Gibraltar’s legal system is based on English common law. Its investment fi rms are well supported by industry professionals with the ‘big four’ audit fi rms, international banks, lawyers and fund administrators all having estab-lished operations on the Rock. Th e Financial Services Commission (FSC) is responsible for authorising and regulating investment fi rms.

ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE Th e Alternative Investment Fund Managers Directive (AIFMD), a European Union directive, was transposed into Gibraltar law on the 22 July 2013 and imposes har-monised conditions and requirements on the structure and operation of alternative investment fund managers (AIFMs). In return, AIFMs are able to market alternative investment funds (AIFs) to professional investors across the EU. Small AIFMs (those who manage open-ended AIFs of less than €100m, or manage unleveraged closed-ended AIFs of less than €500m), are out of scope of the AIFMD. Small AIFMs can market to professional investors across the EU on a member state-by- state basis via the respective EU private placement regimes.

Hong Kong managers wishing to raise capital in the EU must seek solutions to enable them to market their funds there, and Gi-braltar can provide these solutions. Marketing, as de-

fi ned in the AIFMD, means a direct or indirect off ering or placement at the initiative of the AIFM or on behalf of the AIFM of units or shares of an AIF it manages to investors domiciled or with a registered offi ce in the EU.

Marketing options available under AIFMD are:• National private placement regimes (NPPRs): Th is

involves marketing in a specifi c member state via re-spective member state NPPRs and is applicable to small AIFMs and non-EU AIFMs. Mangers need to undertake careful due diligence as marketing regimes are not fully harmonised. Th ese regimes, under current recommendations, will be phased out by 2018.

• Passporting: Th is is the compliant, safest and most effi cient option for in scope AIFMs aff ording the ability for EU wide marketing, via passporting, to professional investors in all 28 EU member states.

Reverse solicitation is not marketing, nor should it be considered a marketing strategy, but refl ects the situa-tion whereby a professional investor in the EU may invest in AIFs on their own initiative irrespective of where the AIFM and/or the AIF is established.

Th e Financial Times on 10 May this year reported that more than 550 private equity and hedge fund managers from outside the EU had registered with the UK’s Finan-cial Conduct Authority (FCA) to market their funds in

the UK in accordance with the UK’s national private placement regime. Of these, 263 were from the US and just 14 from Hong Kong and Singapore each. Th is seems to imply that manag-ers throughout the world are marketing in the UK via reverse solicitation.

Th e AIFMD does not set out specifi c penalties or sanctions for breach of the marketing restrictions but it is left for individual mem-ber states to determine what punishments are appropri-ate; these could be regula-tory, civil or criminal.

HONG KONG MANAGERS WISHING TO RAISE CAPITAL IN THE EU MUST SEEK SOLUTIONS TO ENABLE THEM TO MARKET THEIR FUNDS THERE,

AND GIBRALTAR CAN PROVIDE THESE

”

Philip Canessa is a senior executive with Gibraltar Finance and focuses on the development of the funds and asset management sectors in Gibraltar. He has more than 30 years of experience in financial services and for 11 years was managing director of a specialist investment firm managing portfolios of hedge funds.

PHILIP CANESSA OF GIBRALTAR FINANCE OUTLINES WHAT THE JURISDICTION CAN OFFER ASIAN FUND MANAGERS LOOKING TO RAISE CAPITAL IN EUROPE

GIBRALTAR: DELIVERINGEU SOLUTIONS FOR HONG KONG-BASED MANAGERS

F U N D A S S O C I AT I O N

H F M W E E K . CO M 21

As an example, in the UK, when an AIFM unlawfully markets an AIF such unlawful marketing qualifies as a criminal offence. Additionally there is a risk of civil actions from investors who may claim that the AIFM engaged in unlawful marketing which may result in the investor re-scinding the contract of investment in the respective fund.

THE GIBRALTAR OPTIONHong Kong-based managers need to assess the effects of AIFMD and their options for marketing to professional investors in the EU. One option available is for a Hong Kong manager to set up an investment management firm in Gibraltar which would manage a Gibraltar fund. Under the AIFMD (subject to certain conditions), the Gibral-tar AIFM could then delegate the portfolio management function to its Hong Kong-based investment management firm while retaining the risk management function (and vice versa).

A second option could be to use a Gibraltar AIFM ser-vice provider for the Gibraltar fund. The Gibraltar AIFM service provider could then delegate the portfolio man-agement function to the Hong Kong based manager. This option provides a good working solution for accessing the EU marketing passport.

GIBRALTAR’S FUNDS REGIMEGibraltar’s funds regime encompasses experienced inves-tor funds (EIFs), private funds, Ucits funds and non-Ucits retail funds. EIFs are available to ‘experienced investors’ as defined in the regulations, with the minimum invest-ment amount being €100,000 or €50,000 if the investor is professionally advised. EIFs have a number of advan-

tages including the quickest time to market in the EU, a pre-authorisation launch option, ability to opt into the AIFM regime (even if below AIFMD scope), tax neutral-ity and competitive costs. In addition, post the submission of relevant documentation to the Financial Services Com-mission along with the passporting notices, an EIF can be marketed throughout the EU via the EU marketing pass-port after 20 business days.

GIBRALTAR STOCK EXCHANGE (GSX)GSX is an EU regulated exchange licensed by Gibraltar’s Financial Services Commission. It is currently authorised to act as a technical listing exchange for open-ended funds with plans to extend its exchange services in 2015 to in-clude closed-ended funds and securitisation.

GSX can be a passive route to Europe for funds by af-fording visibility and connectivity between investors and managers. Investors can search for a fund by several specific characteristics – for example asset class, currency, geogra-phy or manager – and following registration and signing of a disclaimer, the investor can be connected with the fund’s manager for investment in the fund. Hong Kong manag-ers wishing to benefit from this visibility and connectivity can list their funds (EU and non-EU alike) through GSX’s cost-effective, six-to-eight-week listing process.

Gibraltar is well equipped to provide EU solutions for Hong Kong managers; it is well regulated, cost effective and has the quickest time to market in the EU. Gibraltar is the gateway to the EU.

For further information, email: philip.canessa@financecentre.gov.gi or visit: gibraltarfinance.gi.

2 2 H F M W E E K . CO M

S E R V I C E D I R E C TO R YH O N G K O N G 2 0 1 5

Orangefield Group, Vincent Bremmer // email: vincent.bremmer@orangefield.com // Catherine Law // catherine.law@orangefield.com // Tel: +852 2854 4544 // web: http://fs.orangefield.com

Orangefield Fund Services offers a comprehensive suite of Administration Services to Alternative Investment Funds, providing Solution Driven Service Packages specifically tailored to hedge funds, private equity funds, fund of funds, and real estate clients. We offer fund accounting and valuation services, middle office, compliance, shareholder services, and management solutions, all designed to optimize efficiency and strengthen your competitive advantage.

Maples Fund Services, Eastern Fong // Tel: +852 3655 9005 // email: eastern.fong@maplesfs.com // San San Fan // Tel: +65 6436 6917 // email: sansan.fan@maplesfs.comMaples Fund Services is a leading independent global fund services provider operating in key onshore and offshore financial centres including Boston, the Cayman Islands, Dubai, Dublin, Hong Kong, Luxembourg, Montreal, New York, San Francisco and Singapore. Working within these key jurisdictions, we provide customised fund services to the diverse and sophisticated needs of our clients and their investors. Our expert teams and leading technologies provide clients with high-quality service and consistent and timely reporting. As a firm recognised internationally by managers and investors for its quality and professional-ism, our clients are confident in the integrity and independence of our policies and procedures, and in the ability of our adaptable solutions to address their ever-changing needs.

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Hong Kong Exchanges and Clearing Limited (HKEx), Sharon Ang, Senior Vice President, Client Business Development // email: sharonang@hkex.com.hk // Tel: (852) 2211 6151 // Ivan Chan, Vice President, Client Business Development // email: ivanchan@hkex.com.hk // Tel: (852) 2211 6038HKEx Group is a leading operator of exchanges and clearing houses, and one of the world’s largest exchange groups by market capitalisation. The Group includes HKEx, the company that operates Hong Kong’s securities and derivatives markets. HKEx also operates clearing houses in Hong Kong. Three provide clearing and settlement services for exchange-traded products and one focuses on the over-the-counter market. HKEx is the frontline regulator of companies listed in Hong Kong. HKEx Group is a leader in the trading and clearing of commodities derivatives through its ownership and operation of the London Metal Exchange (LME) and the LME’s clearing house.

Henley Business School, Neil Logan, Director Asia Pacific, Henley Business School // Tel: +852 2529 9377 // email: neil.logan@henley.comDennis Chan // Tel: +852 2529 9377 // email:dennis.chan@henley.com

Henley Business School – Executive Hedge Fund ProgramA unique program created and delivered by leading industry professionals offers a comprehensive understanding of hedge funds from set-up to managementhttp://henley.asia/executive-education/executive-hedge-fund-program/

Complyport (HK) Limited Stuart Somer // Tel: +852 2509 0988 // Fax: +852 2509 0588 // email: info@complyport.hk // web: www.complyport.com // Suite 1501, Nine Queen’s Road Central, Hong Kong

Complyport (HK) Limited is a leading compliance and regulatory consultancy providing practical compliance solutions for Hong Kong-based fund managers. Established in 2001, Complyport is one of the UK's largest consulting businesses solely dedicated to compliance, combining former regulators, industry practi-tioners and qualified lawyers. Complyport (HK) Limited’s principal is a US-trained capital markers lawyer who has worked establishing and providing on-going compliance, legal and structuring advice to hedge fund managers, investment funds and brokerage firms since 1996.

AIMA – Alternative Investment Management Association Heide Heiden-Blunt, Managing Director, Head of Asia-Pacific // Tel: +852 2526 0222 // email: hblunt@aima.org // web: www.aima.orgAIMA is the global hedge fund industry association, with over 1,500 corporate members (and over 8,000 individual contacts) in over 50 countries. Members include hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting firms, investors, fund administrators and independent fund directors. AIMA’s manager members collectively manage more than $1.5 trillion in assets. All AIMA members benefit from AIMA’s active influence in policy development, its lead-ership in industry initiatives, including education and sound practice manuals, and its excellent reputation with regulators worldwide. AIMA is a dynamic organisation that reflects its members’ interests and provides them with a vibrant global network. AIMA is committed to developing industry skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA). For further information, please visit AIMA’s website, www.aima.org.

Finance Malta, Ivan Grech, Head of Business Development // Bernice Buttigieg, Head of Adminstration // FinanceMalta, Garrison Chapel, Castille Place, Valletta, VLT1063, Malta // email: info@financemalta.org // Tel +356 21224525 // Fax +356 2144 9212 // web: financemalta.org FinanceMalta, a non-profit public-private initiative, was set up to promote Malta’s international Business & Financial Centre, both within, as well as outside Malta. It brings together, and harnesses, the resources of the industry and government, to ensure Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper. The Board of Governors, together with the founding associations: The Malta Funds Industry Association, the College of Stockbrokers, the Malta Bankers Association, the Malta Insurance Association, the Association of Insurance Brokers, the Institute of Financial Services Practitioners, and the Malta Insurance Managers Association which is also affiliated; its members and staff are committed to promote Malta as a centre of excellence in financial services and international business.

Maybank Kim Eng Securities Pte. Ltd., Ade Olopade, Head, Prime Execution Services // email: primeservices@maybank-ke.com.sg // Sales Tel: +65 6226 0300 // Len White, Head of Sales// prime@maybank-ke.co.uk // UK Sales Tel: +44 20 7332 0235Maybank Kim Eng Securities Pte. Ltd (part of Maybank Group, ASEAN's fourth largest banking group), provides a full prime brokerage service covering securities financ-ing, fixed income, synthetic equities and securities lending solutions to newly incubated hedge funds, family offices, proprietary traders, and asset managers with managed account platforms. Our responsive client-centric prime brokerage service provides our clients with a dedicated execution desk, regional research coverage, and a flexible and scalable EMS agnostic order management system that is fully integrated into our bespoke suite of reports. Maybank Kim Eng is your ASEAN platform for Global Solutions!

Sinopac Solutions & Services, Brendan Petchell, Business Development Manager // Tel: +852 3974 3852 // email: brendan.petchell@sinopac.com // Steve Bernstein, CEO // Tel: +852 3974 3855 // email: steve.bernstein@sinopac.com

A full service Fund Administration company offering Fund Administration & Accounting, Business Administration, Middle Office and Investor services. Clients include Hedge Funds, Private Equity, Family Offices and Wealth Managers.We also offer a licensed platform environment for funds within SinoPac Asset Management as well as distribution capabilities through licensed group compa-nies (Bank SinoPac, SinoPac Securities and SinoPac Asset Management)www.sinopacsolutions.com

Quality Risk Management & Operations (QRMO) Limited, Michael Langton, Head of Sales & Marketing - Quality Risk Management & Operations (QRMO) Limited, Tel: +1 852 2217 7612 // Fax: 852.2217.6354 // email: michael.langton@qrmo.com // web: www.qrmo.comQRMO is an industry leader in providing risk management, middle-office and back-office solutions for hedge funds, family office, and all types of financial institutions in Asia. As an award-winning company, QRMO delivers an institutional-grade and customizable solutions across a broad array of strategies and product types, enabling its clients to meet increasingly stringent demands from investors and regulatory bodies. The end result is higher alpha generation from our clients and increased confidence and comfort felt by their investors and regulatory agents that clients of QRMO are adopting "best practices" when it relates to their risk and operational infrastructure.

Contact usHong Kong t +852 2854 4544

Singapore t +65 6593 3700e info.hk@orangefield.com

w http://fs.orangefield.comw http://www.orangefield.com