Hong Kong Committed To Developing Islamic Finance

by Mary Swire, Tax-News.com, Hong Kong

12 August 2008

Hong Kong has the strengths and capabilities to develop its Islamic finance sector and contribute to the growth of the global Islamic finance market, according to the Chief Executive Officer of the Hong Kong Securities and Futures Commission (SFC), Martin Wheatley.

Wheatley told a forum on Islamic finance held in Malaysia on Tuesday that Hong Kong has an open market economy, world class infrastructure and enjoys high transparency in its policies and regulation. These provide market players with the level playing field that is vital to the growth of the financial markets, he said.

The SFC’s latest Fund Management Activities Survey has confirmed Hong Kong’s leading position as an international asset management centre in Asia. Over 80% of assets managed in Hong Kong were invested in Asia, reflecting Hong Kong’s unique edge in managing investments in the Mainland and other regional markets.

“The SFC has been working closely with the Hong Kong Government to ensure that Islamic investors can also utilise Hong Kong as a platform to manage their wealth and invest into other Asian markets, including Mainland China,” disclosed Wheatley.

Hong Kong has a track record of financial innovation and is a fertile ground for the development of new investment products. Over the past year, the SFC has facilitated the introduction of a number of Islamic-related financial products developed by the market, which have been well received by investors.

The SFC authorised the first Islamic fund for sale to retail investors in the territory in November 2007, and in January 2008, Chief Executive Donald Tsang led a group of business executives to Kuwait, Saudi Arabia and the United Arab Emirates to showcase the the city's international financial centre to business and political leaders in the Middle East, a major target market for Hong Kong.

Hong Kong also strengthened its Islamic finance credentials with the signature in April of a joint regulatory initiative to enhance access to Islamic financial products in Hong Kong and the Dubai International Financial Centre (DIFC).

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