(Yicai) Dec. 23 -- The China Securities Regulatory Commission has raised the sales cap of northbound Mutual Recognition of Funds, or Hong Kong-registered investment funds that can be sold in the Chinese mainland upon meeting certain requirements, to 80 percent from 50 percent.

The clause was one of several amended and released by the CSRC in the revised Regulations on Mutual Recognition of Funds between the Mainland and Hong Kong Memorandum on Dec. 20. The new circular supersedes the previous version from May 22, 2015, and will take effect from Jan. 1, the watchdog noted.

Hong Kong MRFs can be trusts, mutual funds, and other investment programs set up, operated, and publicly sold in the city under its laws and approved for sale in the Chinese mainland by the CSRC.

The move will contribute to further expansion of the scale of northbound MRFs, broaden business development space, and better meet the wealth management needs of mainland investors, according to industry insiders.

The Hong Kong MRF market had 42 products with a sales volume in the mainland of around CNY36.6 billion (USD5 billion) as of Sept. 31, according to China's State Administration of Foreign Exchange. Investments were mainly concentrated in the Asia-Pacific region but have a significant potential for further diversification.

JPMorgan Asset Management China was among the first batch of firms to engage in the MRF business in 2015 and helped over one million mainland investors achieve more diversified asset allocation by the end of September, General Manager Wang Qionghui told Yicai. The revision will allow the firm to offer flagship strategies with more diverse asset categories and broader market distribution to mainland investors, she added.

In addition, JPMorgan Asset Management China will assist international investors in participating in and sharing the benefits of the country's high-quality development through the Hong Kong stock connect program with mainland bourses, Wang noted.

The MRF scheme can directly introduce overseas products to the mainland market, allowing investors to access products that have been operating abroad for many years with a long track record and are directly managed by overseas fund managers, a senior executive at a foreign capital asset manager said to Yicai. Some "closed" MRFs can continue to raise funds in the mainland following the sales limit increase, the person added.

JPMorgan Global Bond Fund has been suspended from mainland subscriptions since Jan. 11 and the JPMorgan Asia Total Return Bond Fund since May 11 due to the previous 50 percent cap.

The optimization of the MRF scheme enriches the product offerings for mainland investors, providing more diversified options in product types, strategies, and investment regions for global asset allocation, said Wang Ying, head of investment and wealth solutions and wealth and personal banking at HSBC China.

Many institutions are preparing to file applications for new products, with global multi-strategy and overseas stock market investments being the main choices, Yicai learned.

Europe, the United States, Japan, and other major markets have experienced an era of low interest rates, during which their solution was global asset allocation, the capital asset manager's senior executive pointed out.

Editor: Martin Kadiev