MARKET ACCESS MEASURES WELCOMED

19-4-2024

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The Hong Kong Special Administrative Region Government warmly welcomed the measures announced by the China Securities Regulatory Commission (CSRC) today to further expand mutual access between the capital markets of the Mainland and Hong Kong.

The measures include: expanding the eligible product scope of equity exchange-traded funds (ETFs) under Stock Connect; including real estate investment trusts (REITs) under Stock Connect; supporting the inclusion of the renminbi stock trading counter under the Southbound trading of Stock Connect; enhancing the arrangements for mutual recognition of funds; and encouraging leading enterprises of industries in the Mainland to list in Hong Kong.

Chief Executive John Lee said the measures are important initiatives to support the further development of Hong Kong's financial markets, increase the number of attractive investment products, provide more investment opportunities to domestic, Mainland and overseas investors, and enhance Hong Kong's status as an offshore RMB business centre.

He noted that CPC Central Committee Hong Kong & Macao Work Office Director and State Council Hong Kong & Macao Affairs Office Director Xia Baolong said on National Security Education Day that ‘as long as Hong Kong asks, the motherland will surely respond, and no matter what difficulties and challenges Hong Kong encounters, the backing and support from the motherland will only increase and will not weaken.’

Mr Lee added: “This further expansion of mutual access between the financial markets of the Mainland and Hong Kong encapsulates our country's firm support for Hong Kong to enhance its status as an international financial centre and fully demonstrates our country as the biggest backing for the development of Hong Kong's financial industry.

“The Hong Kong SAR Government will continue to enhance the competitiveness of Hong Kong's financial markets, proactively contribute to our country's development as a financial powerhouse, commit to our international characteristics, and increase the impetus for growth.”

Financial Secretary Paul Chan also stated that each of the measures will further strengthen Hong Kong's role to connect the Mainland and international capital markets, enable it to better perform as an unique platform to attract capital and high-quality enterprises from both directions, enrich the asset allocation options for Mainland and international investors and provide more investment options for offshore RMB, thereby contributing to the steady and prudent advancement of RMB internationalisation.

He said the country's support for leading Mainland enterprises of industries to list in Hong Kong will benefit the city's initial public offering market, while the increase of listed companies with long-term growth and return potential in Hong Kong will drive the development of the secondary market.

“The further expansion of product coverage under mutual market access will broaden investment options for domestic, Mainland and overseas investors and facilitate their asset allocation. This will attract more capital to the Mainland and Hong Kong markets and benefit long-term market development,” Mr Chan added.

He also pointed out that enabling Mainland investors to trade Hong Kong stocks using RMB through the Southbound trading of Stock Connect will enhance the investment function of RMB offshore.

Mr Lee and Mr Chan thanked the Central People's Government for the strong support to Hong Kong. The finance chief said the Hong Kong SAR Government will closely liaise with the relevant Mainland ministries and institutions to implement the measures as soon as possible.

“In parallel, we will take forward relevant supporting measures at full speed, including waiving the stamp duty payable on the transfer of REIT units, extending the Grant Scheme for Open-ended Fund Companies & Real Estate Investment Trusts, and enhancing the regulatory regime for collective investment schemes and REITs.

“Furthermore, we will strengthen our efforts to attract enterprises and open up new capital sources, and enhance the development momentum of Hong Kong's financial markets continuously,” Mr Chan supplemented.

According to the CSRC’s announcement, the regulators of Hong Kong and the Mainland will work together towards the early implementation of these measures.




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