HONG KONG and mainland securities regulators said Friday they had approved the first batch of funds under a Hong Kong-mainland mutual fund recognition program, in a landmark development that further opens up the mainland’s capital market.

    The program, which regulators first started discussing in 2012, will allow global asset managers to secure a bigger slice of money available for investment on the mainland while also giving mainland managers an opportunity to expand overseas.

    Hong Kong’s Securities and Futures Commission (SFC) said in a statement it had approved four mainland funds that can be offered to the public in Hong Kong under the program.

    The funds are ChinaAMC Return Securities Investment Fund, GF Industry Leaders Mixed Assets Fund, HSBC Jintrust Large Cap Equity Securities Investment Fund and ICBCCS China Core Value Mixed Fund, according to the SFC website.

    Earlier Friday, the mainland’s securities regulator, the China Securities Regulatory Commission (CSRC), said it had approved the first three Hong Kong funds to be offered to mainland investors under the program.

    China’s Ministry of Finance issued a series of tax guidelines for the new program.

    Hong Kong investors in mainland-based funds will be temporarily exempt from taxes on gains from buying or selling fund units under the program, which was launched Friday.

    Mainland retail, but not corporate, investors in Hong Kong-based funds would be subject to a 20 percent tax on dividends, but would be exempt from taxes on gains from the sale of fund units for three years.

    Fund managers started to submit applications for the program in July, but the approval process was delayed amid turmoil in the mainland stock market, according to market insiders.

    Under the rules of the program, a fund must have at least 200 million yuan (US$32 million) in assets and the value of shares/units in the fund sold to investors in the other’s market cannot exceed 50 percent of the fund’s total assets.(SD-Agencies)