HKMA has power to change Tracker Fund manager to get round US sanctions, Hong Kong leaders say
- Calls for a new manager came after incumbent State Street Global said it must fall in line with US sanctions on certain Chinese firms, potentially harming small investors
- The sanctions mean the manager will not be able to track the Hang Seng Index and is no longer fit for duty, says former HKMA head Joseph Yam
Hong Kong’s financial regulator has the power to change the manager of the city’s Tracker Fund to safeguard the interests of retail investors and pensioners facing potential losses after the US sanctioned certain Chinese companies, Chief Executive Carrie Lam Cheng Yuet-ngor said on Tuesday.
That meant it would not be able to continue tracking the strong performance of the Hang Seng Index, analysts warned, potentially harming the investments of some 184,000 Hong Kong retail investors as well as pension funds that rely on it.
However, the Hong Kong Monetary Authority, the city’s de facto central bank, has some remaining influence that may allow it to appoint a different manager of the Tracker Fund, Lam told the media on Tuesday morning.
“The details are to be decided by the HKMA and the relevant supervisory committee,” she said.
