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FSDC releases report on CEPA

The following is issued on behalf of the Financial Services Development Council:

     The Financial Services Development Council (FSDC) today (September 8) released a report entitled "Policy Development Proposals on the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)".

     The report notes that the contributions of CEPA to the economy of Hong Kong have been substantial, helping to drive robust economic growth between 2003 and 2008 at an annual rate of over 6 per cent.

     The report also demonstrates that CEPA has brought tremendous opportunities to different players of the financial services industry in Hong Kong. For instance, more Hong Kong-incorporated banks became eligible to establish branches in the Mainland since 2004 as the asset size requirement was lowered, the introduction of the Renminbi Qualified Foreign Institutional Investors (RQFII) arrangement provided impetus for developing new RMB-denominated investment products in Hong Kong and benefited our securities and asset management industry, and a number of Hong Kong insurance brokerage companies have received approval to set up wholly-owned insurance agencies in Guangdong.

     The Chairman of the FSDC, Mrs Laura M Cha, said, "The Government has been working very hard on further opening up the Mainland market for Hong Kong's financial services industry under CEPA and other arrangements. Nevertheless, there is still considerable room for development under the current CEPA framework and the industry should explore that in greater depth."

     The report provides nine specific policy recommendations, including introducing the negative list concept to CEPA; expanding the setting up of cross-location bank sub-branches and wholly owned insurance agency companies beyond Guangdong Province; allowing entry of small- and medium-sized securities and futures companies and introducing brokers into the Mainland; permitting, for distribution in the Mainland, open-ended mutual funds investing in Hong Kong-listed stocks; setting up a mutual recognition mechanism for investment funds; and relaxing the restrictions on insurance companies to form joint ventures and to make portfolio investment in the Mainland.

     The FSDC believes that the measures proposed would further support development in our banking, securities, futures, asset management and insurance industries, and deepen co-operation between the financial services industries of the Mainland and Hong Kong.

     The report can be downloaded from the FSDC website:

About the FSDC

     The Hong Kong Special Administrative Region Government announced in January 2013 the establishment of the FSDC 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 established five committees, namely the Policy Research Committee, the Mainland Opportunities Committee, the New Business Committee, the Market Development Committee and the Human Capital Committee.

Ends/Monday, September 8, 2014
Issued at HKT 16:31


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