2025.03.05
Recently, JunHe advised China Life Franklin Asset Management Co., Ltd. (China Life Franklin) on its establishment of China Life Franklin OFC ,a Hong Kong public umbrella open-ended fund company (OFC) recognized by the Hong Kong Securities and Futures Commission (SFC), and the company's first sub-fund. The open-ended fund company was recognized by the SFC on February 27, 2025.
China Life Franklin commenced operations in January 2007, and was the first Sino-foreign asset management joint venture in Hong Kong with an insurance background. With the strong support of the entrusting parties within the China Life Group, China Life Franklin has accumulated extensive experience in international investment and has promoted the rapid development of the insurance business through asset management. In addition to managing funds entrusted by China Life, China Life Franklin has actively expanded its third-party business since 2012, making it one of the largest asset management companies in Hong Kong with Chinese shareholders.
The sub-fund primarily invests in short-term deposits denominated in U.S. dollars and high-quality money market instruments issued by governments, quasi-governments, international organizations, financial institutions and corporations. The sub-fund may invest up to 30% of its net asset value in short-term deposits and high-quality money market instruments denominated in non-U.S. dollars. The manager will hedge non-U.S. dollar-denominated investments into U.S. dollars to manage any significant currency risk. High-quality money market instruments include debt securities, commercial papers, certificates of deposit and commercial bills. The sub-fund invests in debt securities which includes, but is not limited to, government bonds, and fixed-rate and floating-rate bonds.
The public umbrella open-ended fund company is targeted at retail investors and is subject to strict regulation by the SFC. JunHe had to consider the needs of a broad group of investors, complete a comprehensive compliance review and address a complex investment structure. As the legal counsel to China Life Franklin, JunHe used its profound expertise and exceptional capabilities in fund establishment to provide comprehensive legal support and advisory services throughout the preparation, establishment and launch of the fund. The legal services provided by JunHe included project preparation, design and optimization, sub-fund structuring, and coordination with the custodian and various professional teams. They drafted the fund establishment documents, the fund prospectus, the product key facts statement and application documents, responded to inquiries from the SFC, and provided modification and response suggestions to the client. With its consistent delivery of top-notch services, JunHe received high recognition, trust and praise from the client. This project laid a solid foundation for Chinese law firms to expand into Hong Kong’s publicly offered fund market. It has also enhanced the firm’s capabilities in providing high-level legal services for Chinese asset management platforms in Hong Kong.
JunHe provides clients with exceptional legal services and support and endeavors to promote the development and innovation of Hong Kong’s fund industry. We are proud to assist and witness the success of our clients and look forward to more collaborations in the future.
Partners QIAO, Zheyuan (Jacqueline) and WANG, Weiwei led the JunHe team, and partner WANG, Weiwei was responsible for the specific work related to the fund establishment.
