Aim is to develop special role for HK

PUBLISHED : Saturday, 18 September, 2010, 12:00am
UPDATED : Saturday, 18 September, 2010, 12:00am

Au King-chi, Permanent Secretary for Financial Services and the Treasury, will address the HKIB's second annual banking conference on Hong Kong's role as China's global financial centre and on shaping government policies for the new financial agenda. Here, she comments on some of the key issues:

What can Hong Kong do to strengthen its role as a global financial centre for China?

A new economic order has emerged since the global financial crisis, with China becoming an increasingly prominent and influential player in the international financial arena. In this regard, we will endeavour to meet our country's overall development needs and contribute to the process of yuan internationalisation. Leveraging our strengths and unique position connecting the mainland with global markets, we aim to develop Hong Kong as China's premier centre for international capital formation, asset management and offshore yuan business.

In which areas would tighter regulations benefit the overall sector?

Investor protection has come to the forefront of public concern during the global financial crisis. While we will continue to enhance our regulatory arrangements in light of international standards and market needs, we are mindful of any protectionist repercussions being mooted in the West. Let me cite some examples of our latest policy endeavours to enhance disclosure and transparency, strengthen investor protection and confidence, and facilitate sustainable market development. We have consulted the public on a proposal to introduce certain statutory requirements for listed companies to disclose price sensitive information earlier this year. We are analysing the consultation feedback and aim to introduce new legislation next year. We also introduced an amendment bill in July to improve the offering regime for structured products. In parallel, financial regulators have introduced a series of new requirements to enhance investor protection. These include more robust risk disclosure for investment products, segregating banks' business into deposit-taking and investment activities and a cooling-off period for selling unlisted structured products. To align with international practices and better protect insurance policyholders, we are consulting the public on the establishment of an independent insurance authority.

What could banks do to return the focus to customers and depositors?

Notwithstanding these initiatives, we will only succeed if financial institutions carry on business with integrity and transparency. On-the-job training is crucial to upgrading financial intermediaries' expertise and proficiency, and helping them meet the changing market needs and customer aspirations. We also seek to further empower investors through education and appropriate remedial measures. That is why we have consulted the public on a proposal to establish an Investor Education Council and a financial dispute resolution scheme. We are analysing public comments to consider the way forward.