Keynote speech by Permanent Secretary for Financial Services and the Treasury (Financial Services) at Hong Kong Exchanges and Clearing Limited's Integrated Fund Platform Order Routing Service Launch Ceremony (English only) (with photos)
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Bonnie (Chief Executive Officer of the HKEX, Ms Bonnie Chan), distinguished guests, ladies and gentlemen,
It is my great pleasure to join you all today at the Launch Ceremony of the Order Routing Service under the Integrated Fund Platform operated by the HKEX.
Digital infrastructure is key to the operation and development of the modern-day capital market. Today's launch ceremony signifies a solid step in the construction of a market-wide infrastructure for our fund management industry leveraging the advancement in technology.
For the first six months of this year - 2025, the Hong Kong stock market's daily turnover reached HK$240 billion on average, up 118 per cent year on year. We also saw 44 IPOs (initial public offerings) raising a total of HK$107 billion, surpassing the annual figure of 2024 by 22 per cent and assuming a leading position in the world's IPO fund raised during the same period this year.
Fund flows in the collective investment scheme and asset management space are equally active. As of end-March 2025, for Hong Kong-domiciled funds, an overall net inflow of about HK$343 billion was recorded over the past 12 months, representing an increase of 285 per cent year on year. The AUM (assets under management) surged by close to 40 per cent, and the number of licensed corporations providing asset management services rose by about 5 per cent.
As our capital market continues to grow in depth and breadth, we need to maintain the robustness and nimbleness of our backbone infrastructure to keep up with the demand and cater for future development. Legislative framework and regulatory regimes also have to be refreshed from time to time in order to bring out the growth potential in the marketplace and remove bottlenecks and inefficiencies that may exist.
For example, to enrich the suite of products that can be made available to the market, the Government has amended the Securities and Futures Ordinance and enacted a new piece of legislation to introduce the open-ended fund company or OFC and limited partnership fund or LPF regimes to enable funds to set up in company and limited partnership forms. The diversified fund structures have been well received. As of the end of May this year, over 560 OFCs have been set up, and nearly 1 150 LPFs have been established in Hong Kong.
In addition, we keep enhancing our connectivity with the Mainland market. For example, since the launch of the Cross-boundary Wealth Management Connect (WMC) 2.0 in the Guangdong-Hong Kong-Macao Greater Bay Area in February 2024 which, among other enhancement measures, allowed the investment quota per investor to go up to RMB3 million, there has been a significant increase in the number of investors and amount of cross-boundary fund remittances. As of end-May 2025, some 158 000 individual investors participated in the WMC. Cross-boundary fund remittances amounted to over RMB115 billion, around seven times increase compared with WMC 1.0.
We are also expanding our international network. Two ETFs (exchange-traded funds) tracking Hong Kong indices were listed on the Saudi Exchange last year. In May this year, we saw Asia's first investment-grade sukuk ETF listing in Hong Kong, as well as a new Mutual Recognition of Funds arrangement reached with Ireland.
All these market development initiatives are going hand in hand with the upgrading of our financial market infrastructure. The HKSAR (Hong Kong Special Administrative Region) Government has been working with parties concerned to establish paperless, straight-through and one-stop integrated digital platforms for the provision of financial services, taking advantage of fintech developments and the rise of blockchain and AI. The goal is to increase efficiency and lower costs. As a key market operator, the HKEX has an important role to play in this, and we are very pleased to have the HKEX's active participation and partnership in this journey.
The implementation of an uncertificated securities market in Hong Kong, for example, will be a significant step towards modernising our securities market. It will allow individual investors to own securities in their names without a paper certificate and manage transactions through a digitalised platform. The Government, in collaboration with the Securities and Futures Commission and the HKEX, has completed all the relevant legislative work this year, with a view to launching the regime in the first half of 2026 following market preparations.
Moving from securities to funds, I am glad to note that the first phase of the Integrated Fund Platform, the Fund Repository, has received positive responses for its comprehensive coverage and ease of use. I am also very pleased to note that the second phase of the Platform, the Order Routing Service launched today, has attracted the participation of major banks, transfer agents, brokers and fund houses. Leveraging the Communications Network developed jointly with the Shenzhen Stock Exchange, the Order Routing Service provides end-to-end transmission of subscription and redemption orders among fund distributors and transfer agents. I understand that development work on additional functionalities in the next phase, including nominee services and facilitation of payment and settlement, is under way.
The development of an efficient and vibrant fund distribution ecosystem will drive market efficiency and lower transaction costs. This would in turn benefit end-investors and help realise our vision as the world's top asset management hub and strengthening our status as an international financial centre. I congratulate the HKEX and its partner organisations on reaching this milestone and look forward to the full operation of a one-stop Platform encompassing the entire functionalities taking heed of user experience and stakeholder feedback. Thank you.
Ends/Thursday, July 3, 2025
Issued at HKT 19:44
Issued at HKT 19:44
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