As China’s gateway to global capital, Hong Kong has a key role in safeguarding financial stability and national security
- By regulating for safe, stable market operations, and addressing cross-border capital flow risks, Hong Kong can safeguard China’s economic and financial security
More importantly, the mainland and Hong Kong financial regulators have formed a close partnership in regulatory and enforcement cooperation over the years. This lays an important foundation for monitoring cross-border capital flows which helps safeguard national financial security and stability.
Hong Kong has been keen to develop more diversified risk management tools, particularly financial derivatives products linked to the performance of mainland assets. The launch of these products would mitigate the risks of sharp market fluctuations and boost their confidence in investing in mainland assets.
Ultimately, this would facilitate globalisation of the mainland’s capital market, and help manage cross-border risks and safeguard financial security in the mainland’s opening of capital markets.
Hong Kong is an open market with free flow of capital. Events in other major markets could have knock-on effects with a significant impact on our financial markets. As the securities regulator in Hong Kong, the Securities and Futures Commission (SFC) is actively involved in the formulation of global policies which could affect the city.
We chair the board of the International Organisation of Securities Commissions and participate in the Financial Stability Board established under the Group of 20. We have also built close cooperative relationships with our overseas regulatory counterparts to jointly maintain the stability of the global financial markets.
The SFC’s role in setting the general direction of global policies reflects Hong Kong’s vital position as a leading international financial centre and its leadership in the development of global regulatory initiatives. In addition, we adapt to change by continually reviewing our regulatory approach and enhancing our regulatory framework to meet the needs of the Hong Kong market, as well as to align with international developments and standards.
SFC must continue to flush out those who try to corrupt market
A sound regulatory framework is the cornerstone of a market’s sustainable, stable and long-term development. In the SFC’s day-to-day regulatory work, it plays multiple roles as a gatekeeper, regulator and law enforcer. It also plays a key part in maintaining the integrity of Hong Kong’s financial markets and investor confidence.
Financial markets are a major driver of Hong Kong’s economic development. Over the years, our markets have stood the test and operated in a fair and orderly manner. Despite the multiple challenges brought about by the Covid-19 pandemic, global economic turmoil and Sino-US relations, Hong Kong’s financial system has held steady in the past year and its core competitiveness remains unchanged notwithstanding these challenges.
Our equity, bond and fund markets have also held steady and even rallied considerably. This goes to show that Hong Kong has a sound regulatory framework and prudent regulatory policies to promote the resilience of the financial system and maintain financial market stability.
We will continue to collaborate with our regulatory counterparts to achieve our common goals and strive to ensure the smooth operation of Hong Kong’s financial markets to safeguard national security and financial stability in the interest of Hong Kong’s long-term prosperity and stability.
Tim Lui is the chairman of the Securities and Futures Commission of Hong Kong