### Securities and Futures Ordinance 《證券及期貨條例》

112K. Instrument of incorporation of open-ended fund company
(1) An open-ended fund company must have an instrument of incorporation prescribing regulations for the company.
(2) The instrument of incorporation of an open-ended fund company must contain—
(a) the name of the company;
(b) a statement that the registered office of the company is situated in Hong Kong;
(c) the objects of the company;
(d) provision as to the kinds of property in which the company is to invest;
(e) a statement that the company is an open-ended fund company with variable share capital;
(f) a statement that the amount of the paid-up share capital of the company is at all times equal to the net asset value of the company;
(g) a statement that the company’s shareholders are not liable for the debts of the company;
(h) a statement that the company’s scheme property is entrusted to a custodian of the company for safe keeping in compliance with the law; and
(i) any other matters prescribed by the OFC rules.
(3) For an open-ended fund company with sub-funds, its instrument of incorporation must also contain a statement that the assets of a sub-fund of the company belong exclusively to the sub-fund and are not to be used to discharge the liabilities of, or the claims against, any other person, including the company and any other sub-fund of the company.

112L. Effect of instrument of incorporation
(1) Subject to this Ordinance, the instrument of incorporation of an open-ended fund company, once registered under this Ordinance—
(a) has effect as a contract under seal—
(i) between the company and each shareholder; and
(ii) between a shareholder and each other shareholder; and
(b) is to be regarded as containing covenants on the part of the company and of each shareholder to observe all the provisions of the instrument.
(2) Without limiting subsection (1), the instrument of incorporation of an open-ended fund company is enforceable—
(a) by the company against each shareholder;
(b) by a shareholder against the company; and
(c) by a shareholder against each other shareholder.
(3) Money payable by a shareholder to an open-ended fund company under its instrument of incorporation—
(a) is a debt due from the shareholder to the company; and
(b) is of the nature of a specialty debt.

### Securities and Futures Ordinance 《證券及期貨條例》

112M. Contracts made by or on behalf of open-ended fund company
(1) This section applies to—
(a) a contract that would be required by law to be in writing and under seal if made between natural persons;
(b) a contract that would be required by law to be in writing, and to be signed by the parties to the contract, if made between natural persons; and
(c) a contract that, though made orally and not in writing, would by law be valid if made between natural persons.
(2) A contract specified in subsection (1)(a) may be made by an open-ended fund company—
(a) in writing under the company’s common seal (if any); or
(b) in writing executed in accordance with the OFC rules and expressed (in whatever words) to be executed by the company.
(3) A contract specified in subsection (1)(b) may be made on behalf of an open-ended fund company in writing signed by any person acting with the company’s authority (whether express or implied).
(4) A contract specified in subsection (1)(c) may be made on behalf of an open-ended fund company orally by any person acting with the company’s authority (whether express or implied).
(5) A contract made by or on behalf of an open-ended fund company in accordance with this section—
(a) is effective in law; and
(b) binds the company and its successors and all other parties to the contract.
(6) A contract made in accordance with this section may be varied or discharged in the same manner in which it is authorized by this section to be made.

112N. Contracts made before open-ended fund company’s incorporation
(1) This section applies if a contract purports to have been made in the name or on behalf of an open-ended fund company before the company was incorporated.
(2) Subject to any express agreement to the contrary—
(a) the contract has effect as a contract made by the person purporting to act for the company or as an agent for the company; and
(b) the person is personally liable on the contract and is entitled to enforce the contract.
(3) After incorporation, the company may ratify the contract to the same extent as if—
(a) the company had already been incorporated when the contract was made; and
(b) the contract had been made on the company’s behalf by an agent acting without the company’s authority.
(4) Despite subsection (2)(b), if the contract is ratified by the company, then on and after the ratification, the liability of the person mentioned in that subsection is not greater than the liability that the person would have incurred if the person had made the contract after the company’s incorporation as an agent acting without the company’s authority.

### Securities and Futures Ordinance 《證券及期貨條例》

112O. Contracts made after cancellation of registration
If—
(a) an open-ended fund company makes a contract after its registration has been cancelled under section 112ZH or 112ZI; and
(b) the company fails to comply with any obligation under the contract within 21 days of being called on to do so by the other party to the contract,
the person who has authorized the contract is liable, and if the contract was authorized by 2 or more persons, they are jointly and severally liable, to indemnify that other party in respect of any loss or damage suffered by that other party by reason of the company’s failure to comply with the obligation.

112P. Share capital of open-ended fund company
(1) An open-ended fund company may issue shares.
(2) Shares in an open-ended fund company have no nominal value.
(3) The amount of the paid-up share capital of an open-ended fund company is at all times equal to the net asset value of the company.
(4) In this section—
net asset value (淨資產值), in relation to an open-ended fund company, means the balance after deducting the total liabilities of the company from its total assets.

112Q. Shareholders’ liability
The liability of the shareholders of an open-ended fund company is limited to any amount unpaid on the shares held by the shareholders.

112R. Sub-funds of open-ended fund company
(1) The instrument of incorporation of an open-ended fund company may provide for the division of its scheme property into separate parts.
(2) Each separate part of the scheme property of an open-ended fund company is a sub-fund of the company.

### Securities and Futures Ordinance 《證券及期貨條例》

112S. Segregated liability of sub-funds
(1) The assets of a sub-fund of an open-ended fund company belong exclusively to the sub-fund and must not be used to discharge the liabilities of, or the claims against, any other person, including the company and any other sub-fund of the company.
(2) Any liability incurred on behalf of, or attributable to, a sub-fund of an open-ended fund company may only be discharged out of the assets of the sub-fund.
(3) A provision contained in the instrument of incorporation of an open-ended fund company, or in a contract or any other instrument made or executed by an open-ended fund company, is void to the extent that it is inconsistent with subsection (1) or (2).
(4) An application of, or agreement to apply, assets of a sub-fund of an open-ended fund company in contravention of subsection (1) or (2) is void.
(5) An open-ended fund company with sub-funds may allocate any assets or liabilities that—
(a) it receives or incurs—
(i) on behalf of its sub-funds; or
(ii) in order to enable the operation of its sub-funds; and
(b) are not attributable to any particular sub-fund,
between its sub-funds in a manner that it considers is fair to its shareholders.
(6) A sub-fund of an open-ended fund company is not a legal person separate from the company but the assets of the sub-fund may be subject to orders of the court as if it were a separate legal person.
(7) Without affecting subsections (1) and (2) and except as provided by the OFC rules, an open-ended fund company may sue and be sued in respect of any sub-fund of the company and may exercise the same rights of set-off in relation to the sub-fund as apply in respect of companies.