The initiatives embody a waiver on stamp duties paid by ETF market makers, tax concessions for personal fairness funds, and deliberate enhancements to Hong Kong’s AML/CTF regime.
Hong Kong Monetary Secretary Paul Chan has unveiled a number of initiatives to additional develop the monetary providers sector in his funds speech on Wednesday (26 February).
In response to studies, Chan has been beneath stress from lawmakers to faucet the federal government’s HKD 1.1 trillion fiscal reserves to assist Hong Kong experience out its financial stoop, exacerbated by months of civil unrest and the Covid-19 epidemic.
The whole aid bundle introduced is value HKD 120 billion, which is double final 12 months’s quantity.
For monetary providers, the federal government proposes to waive the stamp obligation on inventory transfers paid by ETF market makers to create and redeem ETF models listed within the metropolis. The initiative is aimed toward strengthening Hong Kong’s competitiveness as an ETF itemizing venue and lowering ETF transaction prices.
The federal government may even problem inexperienced bonds totalling HKD 66 billion inside the subsequent 5 years, in a bid to additional develop Hong Kong as a premier inexperienced hub in Asia. The transfer builds on final 12 months’s inaugural inexperienced bond of USD 1 billion beneath the Authorities Inexperienced Bond Programme.
To advertise the event of the retail bond market, the federal government may even problem a minimum of HKD 13 billion value of inflation-linked bonds (iBond) and Silver Bonds this 12 months. Silver Bonds are supposed to supply aged Hong Kong residents with extra applicable funding merchandise.
On retirement monetary planning, the federal government will decrease the minimal entry age of the HKMC (Hong Kong Mortgage Company) Annuity Plan from 65 to 60 to facilitate early participation by these in want. The HKMC Annuity Plan was launched in 2018 to help the aged in turning their belongings right into a lifelong secure cashflow.
The HKMC may even launch a pilot scheme to supply fixed-rate mortgage loans by means of banks, capped at HKD 10 million per mortgage transaction. That is aimed toward offering potential homebuyers extra mortgage choices and at lowering the dangers of rate of interest volatility.
To draw extra personal fairness funds to domicile and function in Hong Kong, the federal government will present tax concessions for carried curiosity they problem, following session with the business and completion of a legislative train. That is along with work already underway to ascertain a restricted partnership regime that meets the operational wants of personal fairness funds, in order to encourage them to arrange in Hong Kong.
The federal government may even work to additional improve Hong Kong’s AML/CTF regime, primarily based on suggestions from the FATF (Monetary Motion Process Pressure) mutual evaluation report. This contains bringing VASPs (digital asset service suppliers) and sellers in treasured metals, stones and jewelry beneath the AML/CTF regulatory framework, following a session later this 12 months.
The complete funds speech is available here.