HK and Malta to Discuss DTA

Hong Kong has been holding preliminary meetings with Malta in order to discuss a bilateral double taxation agreement (DTA). The agreement is being prepared for technical discussions that are scheduled to commence in March 2010.

This would be the 1st DTA signed with by Hong Kong with a country in the south of Europe.

It should be noted that until June 2001 Hong Kong had no DTAs in place. However, the government of Hong Kong is currently entering an increasing number of various tax agreements.

As regards Malta, it has entered into more than 50 DTAs, including those with the UK, Canada, Australia, Germany, France and Italy. All of these agreements follow the OECD model tax treaty convention.

No details on the terms and conditions of the proposed DTA with Hong Kong are available yet.

Filed under: Uncategorized

Hong Kong and Indonesia launch new payment link

Hong Kong and Indonesia have launched a new cross-border payment-versus-payment link between Hong Kong’s USD and Indonesia’s rupiah real time gross settlement systems.

The link started operation on January 25. It will eliminate settlement risk in foreign exchange transactions between the USD and Indonesian rupiah as it will ensure the simultaneous delivery of these currencies.

The link is operated by Hong Kong Interbank Clearing and Bank Indonesia. AS to the ownership, it is jointly owned by the Monetary Authority and the Hong Kong Association of Banks.

Filed under: Banking Services

Hong Kong to bolster financial ties with Shanghai

On January 21, Hong Kong Exchanges and Clearing Limited (HKEx) met with the Shanghai Stock Exchange (SSE) in order to discuss the Closer Cooperation Agreement signed in January 2009. As a result, the two parties agreed to strengthen ties on operational issues and information technology.

HKEx and SSE signed the agreement to work together more closely towards mutual prosperity and contributing to the greater development of the economy of China.

HKEx Chairman Ronald Arculli said: "Through cooperation and exchanges with our friends at SSE, we can learn more about the behaviour and needs of Mainland investors and how we can further support the QDII (Qualified Domestic Institutional Investor) scheme". He also noted that the 2 organizations can learn from each other about the market dynamics created by the growth and development of SSE and HKEx as well as about the latest market trends in the Mainland and Hong Kong.

HKEx’s Listing Division and SSE’s Company Management Department will establish a mechanism for regular exchanges to regulate companies and securities listed in both jurisdictions and protect shareholder interests.  The organizations will  exchange views every 2 months, with the focus on operational issues, including information disclosure by listed issuers. HKEx and SSE will take turns organising the meetings.       

HKEx and SSE will strengthen exchanges and cooperation on information technology that supports business development.

Filed under: HK as a Financial Centre

HK consults on extending Takeover Code to REITS

The Hong Kong’s Securities and Futures Commission (SFC) has launched a consultation in order to solicit public comments on extending the existing corporate codes on takeovers and mergers, and share repurchases, to real estate investment trusts – REITs.

Currently, the existing codes are applied to public companies and companies with a primary listing of their equity securities in the jurisdiction. These codes do not apply to real estate investment trusts, which are legally constituted in the form of trusts.

According to the current rules of the REIT code, where a REIT undertakes any form of merger, takeover, amalgamation and restructuring, the REIT’s trustee and/or management company shall consult with the SFC on the manner such activities could be carried.

The REIT code was issued in 2003, when there would not be active takeover and merger activities. Since the launch of the first REIT in 2005, the Securities and Futures Commission has seen increased corporate activities amongst REITs.

That is why the SFC decided to review the regulatory regime governing takeovers and mergers of REITs to provide better protection for minority unit-holders.

Comments from interested parties are welcomed by the Hong Kong’s SFC by March 8, 2010. After the consultation period, SFC will analyze the comments.

Filed under: HK Law changes

Seminar on Global Financial Crisis & Recovery to be held in January

The Hong Kong Committee for Pacific Economic Co-operation and the Trade & Industry Department will jointly hold a seminar titled The Global Financial Crisis & Recovery: a Regional Co-operation Perspective. The seminar will be held on January 27, 2010 at the South Pacific Hotel, 23 Morrison Hill Road, Wan Chai.

At the seminar, the speakers will be Lingnan University Vice-President Prof Jesus Seade, Li & Fung Group Managing Director William Fung, Deputy Secretary for Financial Services & the Treasury (Financial Services) Cheng Yan-chee, Deputy Vice-Chancellor and Provost of the University of Hong Kong Prof Richard Wong, and MTR Corporation Chairman Raymond Ch’ien. The participants will discuss the influence of the financial crisis on regional co-operation in the Asia-Pacific region, including economic and political co-operation. Also, they will investigate the role of the Asia-Pacific in the post-crisis global economic order.

The seminar will be free, and it will be conducted in English.

Filed under: HK as a Financial Centre

Hong Kong’s foreign currency reserve assets down USD 500 million

According to the Hong Kong Monetary Authority (HKMA), Hong Kong’s official foreign-currency reserve assets decreased to USD 255.8 billion in December 2009, which is a fall of USD 500 million on November 2009.

Including unsettled forward contracts, foreign-currency reserve assets also stood at USD 255.8 billion, which is a decrease of USD 500 million on November.

It is worth noting that the total foreign currency reserve assets of USD 255.8 billion represent about 10 times the currency in circulation.

Based on the latest published figures, Hong Kong is the world’s 7th largest holder of foreign currency reserves. It is preceded by the Mainland, Japan, Russia, Taiwan, India and South Korea.

Filed under: HK as a Financial Centre

HK encourages submissions on FTA with EFTA

The government of Hong Kong has published an invitation to all those who are interested to make submissions on the areas covered by a free trade agreement (FTA) between Hong Kong and the European Free Trade Association (EFTA).

The government confirmed that the 2 sides have agreed to start negotiations on an FTA in the beginning of 2010 in order to provide Hong Kong’s business sector with better market opportunities in the 4 EFTA member states – Switzerland, Norway, Iceland, and Liechtenstein, as well as to bring multiple benefits in trade, income and employment.

It should be noted that Hong Kong and Switzerland, Norway, Iceland and Liechtenstein, are primarily service-oriented economies. Switzerland was only Hong Kong’s 12th largest trading partner in 2007 in terms of trade in services, with such trade totalling HK$ 10.7 billion or USD 1.4 billion, while Norway was 28th, with trade amounting to just over HK$ 920 million. However, merchandise trade between Hong Kong and the EFTA has experienced a remarkable growth for years, with average annual growth of 15.6% from 2004 to 2008. Total merchandise trade between Hong Kong and the EFTA was about HK$ 72 billion in 2008, which makes the EFTA Hong Kong’s 11th largest trading partner in 2008.

The negotiations on FTA are to cover many topics, but the emphasis will be put on trade and investment liberalization and facilitation. February 12, 2010 is the final date for submissions.

Filed under: HK as a Financial Centre