Hong Kong's Securities and Futures Commission said late Friday it had authorized the first fund denominated in renminbi (RMB) for sale to retail investors in this Asian financial hub.

In a statement posted on its website, the SFC said it had been working closely with industry participants to enable the introduction of RMB-denominated investment products to support the initiative to develop Hong Kong into an offshore RMB center.h The SFC didn't disclose the issuer of the first RMB-denominated fund.

But Haitong Asset Management, the Hong Kong unit of the Shanghai-list Haitong Securities, said right after the SFC's statement that it would be issuing a RMB investment fund named "Haitong Global Renminbi Income Fund."

Haitong said it was the first RMB-denominated public equity fund issued by Hong Kong's financial companies. The fund could enable its customers to benefit from both capital revaluation thanks to possible RMB appreciation and from stable bond investment yields.

The issuance of the RMB-denominated fund would also be helpful for the internationalization of the renminbi, it said.

According to Haitong, "Haitong Global Renminbi Income Fund" is a retail open-end fund, requiring the least investment capital of 10,000 yuan (1,476 U.S. dollars). The fund would be used mainly to invest in RMB-denominated bonds.

Lin Yong, chief executive officer of Haitong Asset Management, said RMB-denominated bonds were attractive for investors thanks to its stable bond yields and yuan's expected appreciation.

"We believe the RMB-denominated products will be welcome among investors," he said.

Alexa Lam, the SFC's Deputy Chief Executive Officer and Executive Director of Policy, China and Investment Products, said Hong Kong had a unique role in China's internationalization of its currency.

"As the RMB becomes more popular and widely held outside the mainland, demand for RMB-denominated investment and financial products will grow. Hong Kong's role is to make these products available and manage their risks," she said.

The first retail RMB-denominated fund was authorized under the enhanced product authorization regime, said the SFC in the statement.

Hong Kong's investors are reminded that as with all investments, they should understand the features and risks inherent in RMB-denominated funds before investing. They should read the offering documents and the product key facts statements carefully to ascertain whether specific products are suitable for them.

A RMB-denominated fund generally refers to a fund that adopts RMB as the base currency. Subscriptions and redemptions of units in the fund must be settled and paid in RMB, unless otherwise stated in its offering and constitutive documents.

The RMB-denominated fund is one of renminbi products, which are denominated or settled in renminbi or have exposure to renminbi-linked assets or investments.