Structure and Governance:

Structure: LPFs will be traditional limited partnerships with a General Partner and a minimum of one Limited Partner, whereby the General Partner will assume unlimited liability for the debts and obligations of the partnership (nothing new here compared with other regimes globally). The General Partner must appoint an Investment Manager, and may appoint itself as Investment Manager if it meets certain criteria (more on the Investment Manager registration requirements below). The LPF will not have a legal personality, and the General Partner and Limited Partners will be afforded freedom to contract (e.g., negotiate partnership agreement terms and side letters).

Legal Statute and Registration: The legal statute governing the LPFs will be the Limited Partnership Fund Ordinance. LPFs will be required to register with the Hong Kong Companies Registry, an application to which must be submitted in person by a Hong Kong law firm or Hong Kong-qualified solicitor.

Accounting Treatment: There will be no limitations on the use of certain accounting methods, which will promote continuity across funds for sponsors and streamline investor reporting.

Dissolution: LPFs may be dissolved voluntarily. If the General Partner declares bankruptcy, dissolves, or otherwise ceases to be the General Partner of the LPF, if there is not other replacement designated within 30 days, the LPF will automatically dissolve.

Key Constituents and Duties:

Investment Manager: Any person or entity, whether the General Partner or otherwise, deemed to be the Investment Manager must obtain a license to conduct Type 9 asset management activity from the Hong Kong Securities and Futures Commission (SFC) Ordinance.

AML/CFT Appointee: The General Partner must appoint a “responsible person” to carry out Anti-Money Laundering (AML) and counter-terrorist financing measures, which is a requirement established by the LPF Ordinance.

Key Operational Obligations: The fund sponsor must maintain compliance with the LPF Ordinance and comply with Companies Registry inquiries. The Registry of Companies has regulatory power over LPFs and their operations. The LPF must also maintain a registered office in Hong Kong and a Hong Kong business registration. Additionally, the LPF must appoint a third-party fund administrator to oversee NAV calculations and certain other investor services.