Hong Kong Promoted As Asset Management Centre

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

06 October 2010

In his speech to the Hong Kong Investment Funds Association’s annual conference, the Secretary for Financial Services and the Treasury, Professor K C Chan, emphasized Hong Kong’s role as an asset management hub for the Asian region.

He pointed out that Hong Kong has already established itself as a major asset management centre in Asia, with almost 2,000 authorized unit trust and mutual funds as at the end of March 2010 and assets under management amounting to around USD1 trillion in 2009, a large 45% increase over 2008.

In 2009, he added, Hong Kong was ranked second in Asia-Pacific in terms of asset management business, after Australia and followed by Japan. Hong Kong is widely recognized as having the largest concentration of Mainland asset managers outside the Chinese Mainland, while, in recent years, Hong Kong and China combined have raised more than half of the private equity funds in Asia. In 2009, total equity funds raised through initial public offerings in Hong Kong amounted to USD31.8bn, ranked first globally.

He said that further growth in Hong Kong’s asset management industry will arise from its unique position as China's gateway to the world's financial markets. Hong Kong can help overseas managers in their search for investment opportunities in China, as well as handling money going in the reverse direction.

He confirmed that Hong Kong’s government will continue to encourage fund managers to set up and manage their funds out of Hong Kong. Past measures have included the exemption of offshore funds from profits tax and the abolition of estate duty, while this year's budget proposed a number of measures such as extending the stamp duty concession in respect of the trading of exchange traded funds, extending concessionary profits tax rate for some debt instruments and clarifying concerns on residency of directors of offshore funds.

Hong Kong’s regulators, he said, have also made headway in expanding market access for fund managers, by arranging for the mutual recognition of products and for exposure to Mainland China through products manufactured and distributed in Hong Kong. Hong Kong was also the first market where Mainland monies were allowed to invest overseas through China’s Qualified Domestic Institutional Investor scheme.

The government also recognizes the potential for renminbi-denominated financial and investment products, and will continue to work with Hong Kong and Mainland regulators and agencies to build on progress so far, and in further initiatives.

In particular, he disclosed that the government is working to facilitate further the incorporation of funds in Hong Kong. This, it hopes, will not only attract more funds to be located in Hong Kong but also bring many employment opportunities at all levels - from fund managers to professional services, such as accountants and lawyers to administrative support.

In addition, the government will soon organize a global promotional campaign to showcase Hong Kong as China's global financial centre. It will “introduce Hong Kong as the only place in the world where the China advantage and the global advantage converge at one single city”. The first leg will be a promotional seminar in London on November 16, 2010, and a similar seminar will be organized in North America in the first quarter of next year.

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