Leading Hong Kong filmmaker Tsui Hark will direct The Eye 3 - the next installment in thepopular horror franchise - marking his first collaboration with producerPeter Ho-sun Chan.

ARM Distribution, the recently launched joint venture between Chan'sApplause Pictures and the Ruddy Morgan Organization, and The Little FilmCompany are working together to handle sales on the film here at the AFM.

Principal photography for The Eye 3 is scheduled to start in winter 2006.The story follows a psychiatrist, mourning the loss of her husband in a divingaccident, who brings herself to the point of death in the belief that it willre-unite her with her husband.

The hugely successful The Eye series - including The Eye, The Eye 2 and The Eye Infinity (aka The Eye 10) directed by Danny and Oxide Pang -has sold widely around the world and resulted in two English-language remakeprojects.

The remake of The Eye is being developed by Cruise/Wagner and Lionsgate, while TheEye 2 remake, InUtero, is with New Lineand Gold Circle.

Tsui recently directed martial arts epic Seven Swords which opened the Venice film festivaland was a big hit across Asia last year.

Chan is alsocurrently producing crime thriller Protege, directed by Derek Yee and starring Daniel Wu, which ARMDistribution and The Little Company are also selling at the AFM.