Overview
FundApps has updated the Major Hong Kong Rules to allow ETFs that are not in corporate form to be excluded from rule calculations.
Rules Affected
This update applies to the following rules: Major: Hong Kong, Major: Hong Kong - Short 1%, and Major: Hong Kong - Lending.
Background
According to memorandum 3.4.19, the Major Shareholding Disclosure regime in Hong Kong applies only to “the holding of shares in an ETF[...] which is in corporate form and listed on the SEHK”.
Previously, FundApps conservatively included all ETFs traded on the SEHK.
Non-corporate ETFs, such as ETF trusts, can now be filtered out of calculations.
How the Rules Work
The rules have been recoded to apply the following logic:
Include: ETFs where HasCorporateForm is "undefined" or "true."
Exclude: ETFs where HasCorporateForm="false".
Note that if the HasCorporateForm property is not provided, FundApps will default to including the ETF in calculations. This ensures a conservative approach is maintained where the corporate form status of an instrument is unknown.
How to Use This
If you have identified an ETF that is in trust form, you can exclude it from calculations in one of two ways: set up a data override in FundApps, or provide the property HasCorporateForm set to false in your positions file.
Please use either the InstrumentId or ISIN to identify the instrument when setting this property.
Once the override is in place, the instrument will no longer be included in the calculations from the next file run onwards.