Key Announcements Redefining Hong Kong’s Financial Landscape
- Hong Kong unveils major fintech initiatives to boost co-development of fintech and the real economy.
- Integrated Fund Platform (IFP) to transform the retail fund sector and strengthen Hong Kong’s position as a global wealth management hub.
- Regulatory clarity in focus with SFC’s circulars on tokenized securities and plans to extend authority over virtual assets and stablecoin issuers.
On November 2, significant announcements were made by the Financial Services and the Treasury Bureau (FSTB) during Hong Kong FinTech Week 2023. These announcements underline Hong Kong’s dedication to fintech growth and its crucial role in the region’s financial landscape.
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The Financial Services and the Treasury Bureau (FSTB) unveiled a set of key fintech initiatives aimed at advancing both fintech and the real economy. These initiatives have a paramount goal: to nurture the symbiotic relationship between the financial sector and the real economy in Hong Kong. They carry significant implications for the city’s financial services industry.
One of these initiatives is the Integrated Fund Platform (IFP), a game-changer in the Hong Kong market. The IFP, to be managed by the Hong Kong Exchanges and Clearing Limited (HKEX), is designed to enhance the investment experience for a range of stakeholders, including investors, fund managers, and distributors. This integrated platform acts as a pivotal communication hub, business platform, and an information portal, fortifying Hong Kong’s status as a global asset and wealth management hub.
Moreover, Hong Kong extends its warm welcome to cross-boundary e-CNY applications, collaborating with Octopus Cards Limited (OCL) and Bank of China (Hong Kong) (BOCHK). This partnership has already made strides in facilitating the purchase and use of e-CNY hard wallets, benefiting both Hong Kong residents and Mainland visitors. Furthermore, a potential inbound solution for Mainland tourists is on the horizon, pending regulatory approval and technical readiness.
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Regulation and Innovation
In keeping with the theme ‘Fintech Redefined’ of Hong Kong FinTech Week 2023, the government’s encouragement of Web3.0 technologies is a notable highlight. These technologies are positioned to empower and drive innovation in real economy-related applications. An upcoming session during FinTech Week will offer a platform for market participants to showcase their products and project ideas, marking a significant stride toward real economy integration.
In the regulatory domain, clarity is the goal. The Securities and Futures Commission (SFC) is set to issue circulars addressing intermediaries engaged in tokenized securities-related activities and outlining the tokenization of SFC-authorized investment products. This move aims to shed light on regulatory expectations, particularly concerning investor protection.
Additionally, the government seeks to expand its regulatory authority beyond trading platforms, encompassing the buying and selling of virtual assets (VAs). The regulatory framework for stablecoin issuers is also in the works, with the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) planning a joint consultation on the legislative proposal. Furthermore, banks’ provision of digital asset custodial services is under scrutiny to ensure the safeguarding of client assets and the effective management of associated risks.
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