Following is the speech by the Permanent Secretary for Financial Services and the Treasury (Financial Services), Ms Salina Yan, at the Hong Kong Securities and Investment (HKSI) Institute Annual Dinner today (February 11):
 
Chairman Kevin Liem (Chairperson of HKSI Institute), Chairman Dr Kelvin Wong (Chairman of the Securities and Futures Commission (SFC)), Hon Robert Lee (Legislative Council Member), Tim (Honorary Fellow of HKSI Institute, Mr Tim Lui), Julia (Chief Executive Officer (CEO) of the SFC, Ms Julia Leung), Yan-chee (Managing Director of the Mandatory Provident Fund Schemes Authority, Mr Cheng Yan-chee), Janey (CEO of the Accounting and Financial Reporting Council, Ms Janey Lai), distinguished guests, ladies and gentlemen,
 
     It gives me great pleasure to join you all this evening at the Annual Dinner of the Hong Kong Securities and Investment Institute. This is a good occasion to salute the Institute's achievements, and the contribution of the many avid participants of our financial services community.
 
     Guided by its vision to champion professional standards of excellence in contributing to Hong Kong's role as an international financial centre, the HKSI Institute has become a trusted body in conducting examinations for regulated financial activities and an effective platform for promoting professional development. This is well demonstrated by the 30 000 enrolments for examination it handled and the 11 per cent growth in its individual membership in 2024-25.
      
     Driven by the same pursuit of excellence, our human capital as benchmarked against factors such as the availability of skilled personnel and level of education ranked second highest in the world in the latest edition of the Global Financial Centres Index. This helped anchor Hong Kong's standing as a leading international financial centre, third in the world and first in Asia Pacific.
      
     Let me put this in context with the help of some big picture figures. In year 2000, Hong Kong's GDP (Gross Domestic Product) stood at HK$1,283 billion. It increased by 1.4 times to HK$3,112 billion in 2024. Over the same period, the share of the financial services sector in Hong Kong's GDP increased from 12.8 per cent to 26.2 per cent, while its share in employment increased from 5.3 per cent to 7.2 per cent. Meanwhile, our stock market grew almost nine times from HK$4,862 billion in 2000 to HK$47.4 trillion in 2025 in terms of market capitalisation. The value-added function of our financial services sector is obvious.
      
     Public policy alone cannot build a market. Yet sound policies are essential for creating a conducive environment for the healthy and enduring growth of our capital markets. To illustrate a key principle of public policy considerations, I would point to the Securities and Futures Ordinance where the regulator is given a mandate to maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry. The duality of mandate on regulation and development can also be found in the ethos of our banking, insurance, mandatory provident fund, and accounting and financial reporting regulators. This is more than a balancing act. It is a means to enable the market to create value, allocate capital for growth, respond swiftly to changes, innovate, and capture new opportunities via trusted, quality-assured and open platforms.
      
     Openness is indeed the hallmark of Hong Kong's financial system. Thanks to prudent built-in buffers, diligent cross-agency monitoring and enforcement, alignment with international best practices and standards as well as robust institutional strengths, our financial system has overcome many tests and challenges over the years and has shown remarkable resilience and stability. The strong performance of our equity market last year with IPO funds raised regaining its world leading status is a case in point. And thanks to the "one country, two systems" arrangement, Hong Kong's financial system continues to benefit from the rule of law, respect of contracts, free flow of capital and unique connection with the Chinese Mainland capital markets.
      
     As for the future, uncertainties caused by geopolitics unseen for decades abound. Yet global capital and investors also see ample opportunities in this part of the world, with the Asia region providing significant sources of economic growth. In particular, the national 15th Five Year Plan provides clear pointers for societal and economic developments. Hong Kong stands ready to contribute to help realise the vision.
      
     Along this evening's theme of "Fostering New Opportunities", I would like to share three priority areas of our work to capture the opportunities going forward.
 
Building Multiple Market Pillars
 
     Hong Kong has a vibrant equity market. Average daily turnover rose more than 89 per cent year-on-year to almost HK$250 billion in 2025. Funds raised through IPOs and post-IPOs by way of placing and other means reached HK$285.8 billion and HK$358.6 billion respectively, both representing an increase of more than 200 per cent year-on-year.
      
     From the introduction of weighted voting rights and home coming listings, admission of pre-revenue bio-tech companies and specialist tech companies, to GEM board reform and streamlining of the listing approval process with the median vetting time by the stock exchange down to 32 business days in 2025, we have adopted a reform mindset to keep our fund raising platform nimble in capturing world trends and with our feet grounded firmly on a core value: quality. We will keep enhancing the listing regime. In consultation with the Securities and Futures Commission, the HKEX (Hong Kong Exchanges and Clearing Limited) will conduct a market consultation in the first quarter of this year on specific proposals, including enhancements to the listing regime for companies with weighted voting rights.
      
     Cash market aside, the derivatives market which is important for risk hedging and price discovery also had a record year, with 1.66 million contracts traded daily on average. The HKEX has recently adjusted the interest payments and margin collateral arrangements, thus lowering the costs of trading activities for market participants. It will soon publish measures for streamlining the issuance mechanism for structured products.
      
     Asset and wealth management business is another pillar of strength in our financial system. From the creation of new legal vehicles such as the Limited Partnership Fund to tax concession schemes for single family offices and stamp duty waiver for REIT (real estate investment trust) unit trading, we have introduced a series of facilitative measures and attracted the presence of a critical mass of asset owners and managers. Assets under management (AUM) amounted to HK$35 trillion in 2024 and the growth momentum continued in 2025 with some HK$357 billion net fund inflows for Hong Kong-domiciled SFC authorised funds.
      
     As shown in a survey report released yesterday, over 3 380 single family offices were operating in Hong Kong in end-2025, representing a 25 per cent increase in two years. Working closely with the fund management, private equity and family office sectors, we will introduce legislative proposals to widen the coverage of fund eligible for tax exemption and streamline carried interest arrangement under the tax regime. We will also take forward legislative amendments to facilitate corporate restructuring of REITs.
      
     Gaining perhaps less limelight but not less of our policy attention is the further development of our fixed income and currency (FIC) market. Hong Kong has solidified its position as Asia's leading international bond issuance hub, accounting for nearly 30 per cent of issuances by Asian entities. The amount of green and sustainable bonds arranged in Hong Kong is top of the league in Asia, accounting for 45 per cent of the regional total. Coupled with the frequent issuances of government bonds by the Chinese Ministry of Finance and the HKSAR (Hong Kong Special Administrative Region) Government as well as issuances by multilateral organisations and local corporates, Hong Kong has established a scalable FIC (fixed income and currency) ecosystem. We therefore welcome the publication of a Roadmap jointly by the SFC and the Hong Kong Monetary Authority (HKMA) last September to position Hong Kong as a global FIC hub. The 10-point action plan, with its proposed establishment of a dedicated digital FIC trading platform connecting users with a wide range of liquidity providers, is visionary and at the same time provides practical pathways for boosting issuances and liquidity.
      
     Added to this list of market development initiatives is the move to promote gold and commodity storage and trading in Hong Kong. We aim to upgrade our gold storage capacity to over 2 000 tonnes in three years and are taking active steps to establish a central clearing system for gold trading in compliance with international standards. We have established a wholly government-owned company to serve as the governing body with its board drawing members from both the public and private sectors. The clearing system is scheduled to commence trial operation this year.
      
Widening Connectivity and Embracing Multilateralism
      
     Hong Kong thrives on its hub function in many areas, notably trade, transport and aviation as well as financial services. For financial services, we are connected globally with significant participation of international players. We also have the unique advantage of connecting international investors with Chinese Mainland companies, helping them go global, and providing similar opportunities for Chinese Mainland investors on the capital market two-way street.
      
     Since the launch of the Stock Connect Scheme in 2014, the combined southbound and northbound average daily trading turnover has grown from HK$7 billion to more than HK$330 billion in 2025. ETFs (exchange-traded funds), interest rate swaps, bonds and wealth products have been included in the respective Connect Schemes. Under Wealth Management Connect 2.0, for example, we have included brokerage houses in the network of service providers in addition to banks. To date, more than 170 000 investors in the Greater Bay Area participated in the scheme involving more than RMB 131 billion of funds.
      
     Indeed, we are actively strengthening Hong Kong's off-shore Renminbi business hub role, building on our RMB 200 billion pool of liquidity. Dim sum bond issuance hit the RMB 1 trillion mark last year. RMB 85 billion of bonds have been issued under the HKSAR Government's bond programmes with tenure ranging from two to 30 years. Meanwhile, the HKMA has recently introduced the Renminbi Business Facility to allow banks to provide longer term Renminbi financing by their corporate customers for daily operations and capital expenditures in addition to trade financing. Following the introduction of the dual-counter model in the HKEX for securities listed in both HKD (Hong Kong Dollar) and Renminbi in June 2023, we will introduce a bill into the Legislative Council later this year to allow the related stamp duty payments to be made also in Renminbi.
      
     With our strong financial and legal systems honouring the spirit of a level playing field, Hong Kong appeals to corporates and groups for setting up regional and global bases. We are glad that the company redomiciliation scheme that came into effect last May has already attracted 22 successful applications with many more in the pipeline. Since 2016, qualifying corporate treasury centres in Hong Kong have been enjoying preferential tax treatment. We are keeping the scheme under review.
      
     Likewise, we introduced a legislative framework to facilitate the issuance of Islamic bonds in Hong Kong in 2013. Admittedly, the ecosystem was not as conducive as it is now. With stepped-up outreach to the Middle East and Belt and Road economies, we are glad to see active interactions resulting in the cross listings of ETFs in each other's market and also listings of entities from Kazakhstan, Indonesia and other economies in our stock market recently. We look forward to deepening the relationship through the many cooperation initiatives.
      
     The connection with emerging market economies will be even stronger as the Asian Infrastructure Investment Bank (AIIB) is going to set up an office in Hong Kong. That vote of confidence is in line with Hong Kong's role as a green and sustainability finance hub embracing international disclosure standards and function as a sophisticated financial management centre. It is also a manifestation of the importance we attach to the operation of multilateral institutes such as the AIIB. Multilateralism provides an objective framework for economies to achieve growth through cooperation and settle disputes through civil means. For that, we look forward to welcoming APEC (Asia-Pacific Economic Cooperation) finance ministers to our city in October for the APEC Finance Ministers' Meeting during APEC China 2026.
      
Harnessing Technology and Increasing Market Efficiency
      
     Technological advancement has been an enabler for upgrading our financial infrastructure to increase market efficiency. This is a continuously evolving journey. IPO settlements have been automated and speeded up through FINI (Fast Interface for New Issuance); thanks to all market participants' efforts, trading under severe weather has been successfully implemented since September 2024. This year, we look forward to walking the last mile to enable the full digital holding of securities by investors in their own name and paper-less transfer of titles under the uncertificated securities market mechanism. 
      
     On the societal level, the digital eMPF Platform helps automate MPF (Mandatory Provident Fund) scheme administration. Onboarding has been 98 per cent completed in terms of AUM, with 1.7 million registered users to-date. The automation has brought a 36 per cent reduction in administration fees for members. This is expected to reach 78 per cent in eight years' time.
      
     Technology, however, is not just a passive medium playing an auxiliary role. Digital and AI-enabled technology is driving production and society transformation. It is a key driver of economic growth in itself.
      
     This is evidenced by the fact that last year, about 70 per cent IPO funds raised were for info tech, bio tech, new energy and advanced manufacturing related companies. Last December, the HKEX Tech 100 Index tracking large and mid-cap tech companies listed in Hong Kong and eligible for Southbound Stock Connect was launched. In the digital asset space, the SFC has issued eleven licences for virtual asset trading platforms with two of them subsequently listed in Hong Kong's stock market. And three tranches of tokenized green bonds have been issued under the Government green bond programme, affirming the technical feasibility of on-chain issuances.
      
     The twin-goal of regulation and development will continue to guide the way forward for financial innovation. Prudential and conduct regulatory requirements such as fitness and properness of personnel and segregation of client and proprietary capital are necessary safeguards for investor and user protection.
 
Conclusion
 
     Ladies and gentlemen, while having the privilege of being on stage, allow me to conclude by expressing my sincere gratitude to my fellow public sector regulators and partners for their esprit de corps and hard work over the years. My thanks also go to the many distinguished private sector and industry stakeholders for your frank views and advice. The goodwill to communicate and act for the betterment of our financial market is remarkable, truly living out the spirit of proactive government and efficient market (有為政府，高效市場).
      
     During my public service career, I have spent quite a bit of time in the financial services area that comes under the ambit of the Financial Services and the Treasury Bureau. As a token of my appreciation, I would like to present to you the Chinese character "財" which is made up of two parts: "貝" or shells, the primitive form of money as a unit of account, payment and storage of value; and "才" which gives the sound and in itself means talent, competence, and I would add, integrity. Over the centuries, the financial capital (貝) and human capital (才) have mutated into a lot of sophisticated forms or non-form. Whatever form of existence they may take, I believe that the combined force of financial and human capitals will continue to drive our international financial centre journey in scaling new heights. I thank the HKSI Institute for the honour of addressing you today, and Ruth and team for their excellent implementation of the 10-year long Asset and Wealth Management training programme. As the Year of the Horse is around the corner, I wish you a lot of horse power for your business endeavours and vitality and prosperity for all your pursuits in the days to come.
      
     Thank you.

Ends/Wednesday, February 11, 2026
Issued at HKT 22:02

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