Hong Kong’s Financial Services Development Council (FSDC) has proposed expanding the Connect scheme with China to include private assets.
The scheme currently allows investors in Hong Kong and China to trade stocks, bonds and exchange-traded funds listed in each other’s jurisdictions, and to buy and sell wealth management products via banking channels.
The proposal to widen the scheme was one of several recommendations from the FSDC in a report on December 12 that explores “strategies to align issuers, investors, intermediaries, and financial instruments effectively, with the goal of broadening participation, and accelerating settlement processes”.
The government think tank’s other proposals include refining listing channels for companies that are in the early stages of the business cycle and companies with assets that are largely intellectual property; further developing the offshore renminbi market; and transforming the city into a multi-asset, multi-currency capital formation centre in Asia.
According to Benjamin Hung, chairman of the FSDC, it’s important for Hong Kong to “build an open and interoperable financial nexus that connects capital globally and seamlessly”.
“This entails broadening our asset classes, internationalising our issuers and investors, deepening our multicurrency risk management capabilities, and strengthening our core infrastructure,” he says.
