Hong Kong firmly established as the premier financial centre in Asia-Pacific
Hong Kong has firmly established itself as the premier financial centre in the Asia-Pacific region and is China's natural international financial and capital formation centre, the Secretary for Financial Services, Mr Stephen Ip, said in Sydney today (May 16).
Speaking at the Australia-Asia Financial Services and Investment Conference and Expo in Sydney, pointed out that China's stock market capitalisation was growing fast and this would create great demand for a wide range of professional services - lawyers, accountants, fund managers, brokers & insurance agents.
"Hong Kong is ideally placed to benefit greatly from a fast-developing, more open and more prosperous China market," he said
Mr Ip is in Australia this week to enhance working ties with senior government officials and financial regulators and to update the Australian financial community on the latest market developments and investment opportunities in Hong Kong.
"We firmly believe there will be plenty of business to go around. So what we are doing now is what we've always done: position ourselves as the highest quality market in the region with the highest potential to grow. Quality attracts liquidity and liquidity begets liquidity.
"Parallel efforts have been made to increase the depth and breadth of the market. I chair a Task Force on Financial Market Development to look at ways to increase the user friendliness of our regulatory regime, and facilitate the development of new products and services," he said.
Mr Ip highlighted the development of the debt market and the retail fund sector as two growth areas.
He said there seemed to be a lack of recognition about the importance of ensuring that the bond market was robust and efficient enough to provide a channel for the sudden, large flows of savings that might be diverted away from banks or equities when one or the other faced a crisis. "The result is latent demand waiting to be tapped."
"In Hong Kong, we have taken a conscious step to fully review the debt issuing mechanism and simplify procedures for issuing retail debt," he said.
"The retail fund sector also has good potential. The number of authorised unit trusts and mutual funds registered with the Hong Kong Securities and Futures Commission (SFC) has grown from 920 in 1992 to 1,890 by the end of March 2002.
"Two weeks ago, the SFC announced a set of new guidelines on offering hedge funds to the retail market. This makes Hong Kong one of the few jurisdictions in the world that allows the authorised sale of hedge funds to retail investors."
Mr Ip revealed that an agreement on the mutual recognition of mutual fund managers had been reached during his meetings with the Parliamentary Secretary to the Treasurer, Senator Ian Campbell, and senior officials of the Australian Securities Investment Commission (ASIC) over the past few days.
"This means that Australian fund managers licensed by ASIC to operate schemes that meet the requirements of our Unit Trusts Code will be able to manage schemes authorised by our Securities and Futures Commission. This will be beneficial to the development of the fund management industry in Hong Kong," he said.
Under the agreement, Australia would be recognised as an acceptable inspection regime under the Hong Kong Code on Unit Trusts and Mutual Funds ("UT Code").
The Code requires the investment management operations of a fund management company to be based in a jurisdiction with an inspection regime acceptable to the SFC. The Commission is currently finalising the details for such recognition with ASIC and will shortly begin discussing a co-operation agreement for cross-border supervision of fund management activities.
On ASIC's side, its rules provide relief from certain regulatory requirements so that Hong Kong established standard bond or equities funds that are authorised by the SFC may be marketed in Australia.
Mr Ip has met with Dr Ken Henry, Secretary to the Treasury, in Canberra to discuss financial services matters of mutual concern. Other government officials Mr Ip will meet include Mr Kevin Foley, Deputy Premier and Treasurer of South Australia and Mr Roger Hartley, South Australia's Deputy Chief Executive of the Department of Industry & Trade.
He also has meetings with financial regulators and market leaders to exchange views on the latest developments in both the Australian and Hong Kong financial markets.
During his visit to Australia, Mr Ip has taken the opportunity to promote the huge investment potential of Hong Kong through a series of briefings for local business associations, institutions and the media. On 14 May, he addressed the Asia Policy Update Forum organised by the Asia Society and the Hong Kong-Australia Business Association where he highlighted the strengths of Hong Kong as an international financial centre.
On the question of 'Who needs Hong Kong', Mr Ip said: "More than 3,200 international companies have established their regional bases in Hong Kong. They have chosen the city as the best place in Asia to do business. More than 100,000 companies sourcing products in China for the global market have chosen Hong Kong as the best place to do business with China. More than 250,000 expatriates, including well over 20,000 Australians paying a maximum of 15% salaries tax or 16% corporate profits tax have chosen Hong Kong. Seventy-six of the world's top 100 banks have chosen Hong Kong. More than 100 international insurance companies, including 11 of the world's top 20 have all chosen Hong Kong.
"Actions speak louder than words," Mr Ip added.
End/Thursday, May 16, 2002
