ASIC yesterday signed an agreement with the Hong Kong Securities and Futures Commission (SFC) for the recognition of managed investment schemes in each other's jurisdictions.

The mutual agreement includes authorised collective investment schemes that are regulated by the SFC and managed by SFC-licensed managers, as well as ASIC-registered financial asset schemes. It does not include hedge funds.

"Not only does it present exciting marketing opportunities for our respective funds management industry seeking investment flows from the counterpart jurisdiction, it also gives more choices to the Australian and Hong Kong retail public," ASIC chairman Tony D'Aloisio said.

ING, AMP Capital and Colonial First State are expected to be among the first to benefit from the agreement, because they already have operations in Hong Kong.

IFSA has welcomed the agreement and said it was a significant milestone towards strengthening regulatory ties and co-operation between Hong Kong and Australia.

"We've waited 10 years for this agreement," Investment and Financial Services Association chief executive Richard Gilbert said.

 "Only 3-4 per cent of investment in Australia comes from overseas, and so there are good opportunities for expansion."

Gilbert hopes it will inspire other jurisdictions in the region to take similar steps, and expects Singapore to be the first to follow suit.

"Singapore already has a one-way recognition; they will now have to look into this," he said.