Financial Services Secretary speaks on HK’s potential as China’s Global Financial Centre

During the Bankers’ 2nd Annual Banking Conference, which was held at the Hong Kong Institute, the Permanent Secretary for Financial Services and the Treasury (Financial Services) Au King-chi spoke about the role that the jurisdiction is playing as China’s global financial centre. She said that Hong Kong’s strategic positioning as China’s global financial centre under the principle ‘one country, two financial systems’ gives its financial market “unparalleled strengths in serving China’s development needs, while safeguarding its financial security”.

 

In her opinion, Hong Kong must bring together its China and global advantages to reinforce this status. She added: “As China’s global financial centre, Hong Kong is leveraging its advantages in conducting activities in asset management, offshore renminbi (RMB) business and capital formation, attracting and anchoring capital and talent from within and outside the country.”

 

The Financial Services Secretary also said that Hong Kong needs to align with the regulatory standards of key overseas jurisdictions, to ensure a consistent regulatory regime for operation of financial institutions. She emphasized that HK is pursuing a number of initiatives to enhance market transparency, to improve its regulatory regime to protect investors, and to facilitate compliance and promote market development.

 

In her speech, the Financial Services Secretary also informed on  government’s measures to deepen financial co-operation between mainland China and Hong Kong. She concluded that, having an ‘offshore’ financial status, Hong Kong can be an effective ground for the internationalization of RMB, and the premier listing platform for Mainland China’s companies wishing to go global.

Filed under: HK as a Financial Centre

HK Monetary Authority informs about changes in Deposit Protection Scheme

The Hong Kong Monetary Authority (HKMA) has reminded all authorized banking institutions that the full deposit guarantee introduced by the HK Government in October 2008 will expire, and that the level of protection under the DPS will be increased at the end of 2010 from HKD100,000 to HKD500,000 (USD$64.400).

 

The DPS was established in September 2006 to provide compensation to Hong Kong depositors. In October 2008, the HK government also announced the use of the Exchange Fund to immediately guarantee repayment of all customer deposits held with all authorized institutions in HK until the end of 2010, following the principles of DPS. This temporary measure was aimed at reinforcing depositors’ confidence in placing deposits with banks. Also, in December 2008, the HKMA issued a statutory guideline for authorized institutions which will no longer be applicable after the guarantee expire.

 

The banking institutions are expected to take necessary measures to comply with requirements of the Monetary Authority. They should also alert their customers of the guarantee expiry, and at the same time highlight that an institution is a member of the DPS, and the level of deposit protection under the DPS will be raised upon the expiry of the guarantee since the beginning of 2011.

Filed under: Uncategorized

HK’s officials make visit to Moscow

Hong Kong’s Chief Executive Donald Tsang has made a three-day visit to Moscow, Russia. During this visit he met with the President of Russia Dmitry Medvedev, as well as with the members of the Russian Government and business representatives, to discuss financial, taxation and investment matters existing between the countries.

 

Hong Kong’s official held the meeting with Russian Deputy Prime Minister and Minister of Finance, to discuss the co-operation between HK and Russia in the areas of finance and investment protection by signing the memorandum of understanding. It was agreed that the parties should study the possibility of signing agreement on the avoidance of double taxation. Also, Hong Kong’s officials, including Secretary for Financial Services and the Treasury, met with the  Russian Minister for Economic Development and discussed the possibility of signing an investment promotion and protection agreement.

 

During the meeting with the Russia-Chinese Business Council and the top management of major companies in Russia, Tsang spoke about the advantages of doing business in Hong Kong and emphasized the new opportunities in Hong Kong related with the growth of renminbi business.

Filed under: Business and Economy

Hong Kong government released draft changes on Companies Bill

Hong Kong’s government announced that it is ready to adopt a number of proposals regarding the issues that arose during the first phase of consultations on the draft of the Companies Bill. For example, it was decided to retain the headcount test used in company privatization or restructuring plans for approving a scheme of arrangement.

 

Concerning the recommendation to restrict access to residential addresses of companies’ directors and to the full identification numbers of directors and company secretaries at the public record, the HK  government pointed to the rising concerns of respondents over the protection of personal privacy and information. As a result, it was decided that the residential addresses and ID numbers should not be automatically disclosed on the public register. Still, certain organizations, including public authorities, specified regulators and liquidators as well as those with the court order, can have access to those details.

 

Among other accepted recommendations there are more strict regulations for private companies which are subsidiaries of listed or public companies, for purposes of the provisions on fair dealing by directors. The regulations similar to those for public companies include the prohibition on loans and credit transactions in favor of directors or directors of a holding company, or another company controlled by one or more of its directors.

 

Also, the right for shareholders to take common law derivative action (CDA) on behalf of a company will be retained. This measure provides necessary protection to Hong Kong shareholders and is widely supported by HK professional entities.

 

Public consultation on draft clauses of revised Companies Bill has two phases: the first phase consultation started in December 2009, and the second phase started in May 2010 and was completed in the beginning of August. The above stated proposals will be included in the document, which the Hong Kong government expects to introduce by the end of 2010.

Filed under: HK Law changes