Chief Executive John Lee unveiled multipronged measures in his 2025 Policy Address for cementing Hong Kong’s status as an international financial centre.
Strengthening stock market
By helping Mainland technology enterprises raise funds through Hong Kong’s Technology Enterprises Channel, Hong Kong can strengthen financial support for China’s development as a science and technology powerhouse, the Chief Executive pointed out.
Moreover, Hong Kong will optimise the regimes for listing on the Main Board and issuing structured products, consider enhancements to the listing requirements for companies with weighted voting right structures, and explore shortening the stock settlement cycle to “T+1”.
He added that the city will encourage overseas enterprises to seek secondary listing in Hong Kong; support China Concept Stock companies to return from overseas markets, with Hong Kong as their preferred destination; and press ahead with the inclusion of a renminbi (RMB) trading counter under Stock Connect’s Southbound trading for Hong Kong stocks.
World-leading bond market
To consolidate Hong Kong’s position as a bond market hub, Mr Lee said the Monetary Authority’s (HKMA) “CMU OmniClear” will collaborate with Hong Kong Exchanges & Clearing (HKEX) to explore centralised management and the cross-collateralisation of assets by investors on a single platform. Meanwhile, Hong Kong will establish connections with markets in Switzerland and the United Arab Emirates, and promote the use of offshore Chinese Government Bonds as collateral in clearing houses.
In addition, he noted that the Securities & Futures Commission (SFC) is studying the feasibility of an innovative electronic bond-trading platform built and operated by market participants. It is also promoting the establishment of a commercial repo market and a central counterparty regime in Hong Kong to improve market liquidity.
Furthermore, Hong Kong will continue discussions with Mainland institutions on introducing offshore treasury bond futures in Hong Kong. The city will also expand the variety of interest rate derivatives under Swap Connect, promote the development of over-the-counter derivatives, and explore the launch of the cross-boundary RMB repo business in collaboration with the Mainland.
Additionally, the SFC, HKMA and HKEX will step up market outreach efforts, with a view to encouraging enterprises to issue corporate bonds in Hong Kong.
The SFC and HKMA will set out the details of these measures in the Fixed Income & Currency Roadmap to be published, Mr Lee added.
Vibrant currency market
To enhance the liquidity and global reach of the offshore RMB market in Hong Kong, the Chief Executive said in his Policy Address that the HKMA will introduce an RMB Business Facility, providing enterprises with the longer-term RMB financing required for trade, daily operation and capital expenditure, so as to support the use of RMB in the real economy.
“The HKMA will also explore measures to facilitate foreign exchange quotations and transactions between RMB and other regional currencies in Hong Kong.”
On top of that, he remarked that the Government will issue more RMB bonds and consider settling government expenditure in RMB under suitable circumstances.
Int’l gold trading market
The Chief Executive announced in his Policy Address that he had accepted the Working Group on Promoting Gold Market Development’s five recommendations, which will then be implemented by the Financial Services & the Treasury Bureau:
(i) support Airport Authority Hong Kong and financial institutions to establish gold storage facilities, with a target gold storing capacity of over 2,000 tonnes in three years, propelling Hong Kong into a regional gold reserve hub;
(ii) encourage gold traders to set up or expand refineries in Hong Kong, and explore with the Mainland the feasibility of processing supplied materials in the Mainland to produce refined gold for exporting to Hong Kong for trading and delivery;
(iii) establish a central clearing system for gold in Hong Kong, and invite the Shanghai Gold Exchange’s participation in preparation for mutual market access;
(iv) offer a greater variety of gold investment vehicles, and support the development of new investment products; and
(v) support the setting up of a trade association for the gold industry, with a view to establishing an exchange platform with the Government and regulators, stepping up promotional efforts, attracting clients along Belt & Road, and strengthening talent training.
Int’l risk management centre
To encourage the participation of insurance funds in infrastructure financing, Mr Lee unveiled in the Policy Address that the Government will amend the legislation next year to lower capital requirements for infrastructure investment and provide concessions for local projects. It will also promote the development of exclusive captive and reinsurance business, encouraging the market to introduce more insurance products such as those related to cross-boundary elderly care, cross-boundary driving and low-altitude economy.
Int’l asset, wealth management centre
Mr Lee noted: “Hong Kong is expected to become the world’s largest cross‑boundary wealth management centre in the next few years.”
To this end, he said the city will enhance the preferential tax regimes for funds, single family offices and carried interest to attract more funds to establish a presence in Hong Kong. In addition, the SFC will promote the inclusion of real estate investment trusts (REITs) under mutual market access to increase the liquidity of REITs in the Mainland and Hong Kong.
“We will also facilitate the enhancement of the Qualified Foreign Limited Partnerships mechanism, in particular by collaborating with Qianhai and Shanghai to attract more foreign capital to the Mainland’s private capital market. The Hong Kong Investment Corporation will nurture local private equity and hedge fund institutions with good potential through direct or co-investment.”
Furthermore, adjustments will be made to the New Capital Investment Entrant Scheme.
Mr Lee elaborated: “The scheme will be enhanced, raising the maximum amount of investment to be counted from $10 million to $15 million for the purchase of non-residential properties with no transaction price threshold. As for the purchase of residential properties, the investment to be counted will continue to be capped at $10 million, but the transaction price threshold will be lowered from $50 million to $30 million.”
Green, sustainable finance
To fuel fintech development, the Chief Executive said the HKMA will continue to take forward Project Ensemble, including encouraging commercial banks to introduce tokenised deposits, and promoting live transactions of tokenised assets. The authority will also assist the Government in regularising the issuance of tokenised bonds, and encourage banks to strengthen risk management through the supervisory sandbox.
“We are implementing a regime for stablecoin issuers and formulating legislative proposals regarding licensing regimes for digital asset dealing and custodian service providers.
“The SFC is studying the possibility of offering a wider range of digital asset products and services to professional investors with the prerequisite of sufficient investor protection in place.
“The SFC will also introduce automated reporting and data surveillance tools to build a line of defence against risks associated with digital assets in Hong Kong.”
As regards green and sustainable finance, Mr Lee highlighted that Hong Kong will deepen pilot co-operation with the Greater Bay Area carbon market.
“Working with relevant Mainland regulatory departments and authorities, the Government will study issues surrounding the country’s participation in the international carbon market, including the formulation of voluntary carbon credit standards and methods, as well as the registration, trading and settlement of carbon emission reduction.”
