Hong Kong must extend beyond its role as a receptacle for excess mainland capital if it wants to compete in the global asset management sector, according to a senior Securities and Futures Commission (SFC) official. Executive director Alexa Lam told a seminar, organised by the Hong Kong Securities Institute in January, that the city must seek to attract greater numbers of fund managers from the mainland to set up shop here.
Mainland fund managers would bring more investors from their home provinces to Hong Kong, she said. They could also provide Hong Kong fund managers with hands-on experience in dealing with mainland investment rules and regulations, and serving the investment needs of mainlanders.
The city last year benefited from the larger-than-expected US$52.7 billion quota granted by the mainland State Administration of Foreign Exchange for its qualified domestic institutional investor (QDII) scheme, she said.
Ms Lam added that many of the retail QDII products launched had a significant portion invested in Hong Kong stocks or those of mainland companies listed here. This served to provide some of the liquidity that fuelled the Hong Kong market in the last quarter of 2007.
But she said Hong Kong must be aware that, despite forecasts that quotas would continue to grow and money would continue to flow into the city, mainland capital would look for a broad spectrum of investment opportunities, including to other parts of the world.
Under last year's extensions to the Closer Economic Partnership Arrangement with the mainland, fund managers from across the border can now establish subsidiaries in Hong Kong. She said Hong Kong should attract such fund managers.