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Following is the speech by the Permanent Secretary for Financial Services and the Treasury (Financial Services), Miss Au King-chi, at the opening reception of Dagong Global Credit Rating Co Ltd today (September 4):
Chairman Guan (Jianzhong), Madam Tong (Xiaoling), distinguished guests, ladies and gentlemen,
Good evening. It is my pleasure to join you all at the opening of Dagong Hong Kong. A warm welcome to Dagong for joining our exciting capital market.
An independent and objective credit rating of appropriate quality is key to investor protection. Credit rating agencies play an important role in the international financial market. But they received little public attention until the global financial crisis in 2008. Thereafter, there was international consensus to strengthen the regulatory oversight of credit rating agencies. Hong Kong was amongst the first to introduce a statutory licensing regime for credit rating agencies in 2011. The regime seeks to enhance investor protection. It also seeks to enable credit ratings prepared by Hong Kong-based agencies to continue to be accepted in other jurisdictions. At present, the Securities and Futures Commission has licensed eight agencies, three of which are from the Mainland.
The global financial crisis also exposed weaknesses in our assessment of risk and deficiencies in how credit was rated internationally. Market players pointed out that the emerging markets in Asia had the potential to develop home-grown credit rating agencies, which would be more familiar with the region and possess the necessary knowledge. I am delighted to see that Dagong is getting all set to seize such opportunities.
The capital markets between the Mainland and Hong Kong have become increasingly connected. With this, I believe more and more Mainland enterprises would seek a credit rating as they make use of our financial platform to "go global". Indeed, this is happening through initial public offerings, Renminbi (RMB) trade clearing, bond issuances, syndicated loans and, in the near future, the Shanghai-Hong Kong Stock Connect programme.
In turn, such developments have helped broaden and deepen our capital market and enrich our offshore RMB business and asset management activities.
As the Mainland market continues to open up, Mainland credit rating agencies in Hong Kong will be best positioned to facilitate the growth and expansion of Mainland enterprises as they are "going global". The rating agencies will also be well placed to assist multinational corporations in seeking finance for trade and development in the Mainland and around the world. With our unique "One Country, Two Systems" advantage and international DNA, Hong Kong is the logical domicile for Dagong to grow its regional and global business.
Ladies and gentlemen, this is indeed an excellent time for Dagong to come to Hong Kong. Please join me in extending our warmest congratulations to Dagong. To everyone here and to Dagong, I wish you all every success in the years ahead.
Thank you very much.
Ends/Thursday, September 4, 2014
Issued at HKT 19:27
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