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The following is issued on behalf of the Financial Services Development Council:
The Financial Services Development Council (FSDC) today (September 16) released a report entitled "Enhancing Hong Kong's Role as a Centre for Regional and International Financial Institution Operations: Booking". The report sets out recommendations for enhancing Hong Kong's position as a preferred booking centre, where regional and global financial institutions can enter into contracts for financial products, undertake primary obligations for delivery or payment with respect to financial products, or open and maintain accounts for their clients or counterparties.
The Chairman of the FSDC, Mrs Laura M Cha, said, "We support Hong Kong in becoming a key booking centre, which will bring about more economic activities. The increased asset allocation, liquidity and volume of transactions will not only translate into significant financial revenues for Hong Kong, but will also promote job creation in the areas of financial operations, risk management and compliance. All of these would offer both quantitative and qualitative benefits for Hong Kong.
"There may be concern about the potential of risk accumulation as a result of increased booking activities. We believe the Government would tackle this through appropriate policies and strike a balance between deepening Hong Kong's financial markets and maintaining our regulatory strength. Hong Kong at the very least must encourage booking of transactions with a Hong Kong nexus or connection, especially with respect to China-related transactions."
The report notes that although Hong Kong has actively introduced changes to its regulatory environment to align its standards with international benchmarks, inconsistencies across markets still exist and financial institutions may take advantage of potential regulatory arbitrage in picking what they consider to be more favourable booking locations.
Enhancing Hong Kong's role as a preferred booking centre will facilitate the long-term development of Hong Kong's financial services industry and help to further promote its position and reputation as an international financial centre. The report considers various "push" factors (i.e. the existence of external global regulatory or macroeconomic factors that may potentially push financial institutions to establish a new booking centre in a new jurisdiction) as well as "pull" factors (i.e. potential regulatory or macroeconomic initiatives that Hong Kong may undertake to attract financial institutions to establish a booking centre in Hong Kong). Particular areas of attention include capital requirements and regulatory structure. In this context (capital requirements), the Securities and Futures Commission has already done a considerable amount of work with its recently issued consultation paper (Note) on proposed revised financial resource requirements, which the industry is encouraged to review carefully.
The full report can be downloaded from the FSDC website: www.fsdc.org.hk.
About the FSDC
The Hong Kong Special Administrative Region Government established the FSDC in 2013 as a high-level, cross-sectoral advisory body to engage the industry in formulating proposals to promote the further development of Hong Kong's financial services industry and to map out the strategic direction for development.
The FSDC has set up five committees, namely the Policy Research Committee, the Mainland Opportunities Committee, the New Business Committee, the Market Development Committee and the Human Capital Committee, as the five streams of its work.
Note: Consultation Paper on Proposed Changes to the Securities and Futures (Financial Resources) Rules, Securities and Futures Commission, July 17, 2015.
Ends/Wednesday, September 16, 2015
Issued at HKT 11:00
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