The Hong Kong government has requested that Beijing allow the city to enjoy for a while the status as the only financial centre with mutual recognition of cross-border funds with the mainland, before the central government seals similar deals with other markets. "We have asked Beijing to let Hong Kong continue to be the only financial market worldwide with such a mutual recognition agreement as it would be a big boost for the city's asset management industry," Secretary for Financial Services and the Treasury Chan Ka-keung told the South China Morning Post. It would be possible for Hong Kong to enjoy the status for a while CHAN KA-KEUNG, TREASURY SECRETARY The secretary's statement yesterday came on a day that saw fresh fears of Hong Kong losing its edge following the Shanghai-Hong Kong stock connect scheme, after Deutsche Boerse said it had agreed to set up a joint venture with the Shanghai Stock Exchange and the China Financial Futures Exchange to develop Chinese shares and exchange-traded funds. Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia, however, ruled out any threat to the city. "It is a natural step in the internationalisation of the yuan and liberalisation of the mainland financial markets. It is a positive sign that the mainland will continue to open up. The more open China is and the more international collaboration there is, the more opportunities there will be for Hong Kong," he said. The mutual recognition agreement signed last Friday will allow from July 1 some 600 billion yuan (HK$759 billion) of cross-border fund sales, with 100 Hong Kong funds issued by international fund houses sold on the mainland and 850 mainland funds sold here. "It would be possible for Hong Kong to enjoy the status for a while," Chan said. "This is because Beijing has always been supportive of the Hong Kong fund industry. Plus, such mutual recognition agreements are complicated to work out. Hong Kong and mainland regulators have spent a long time ironing out the regulatory issues before giving the nod to cross-border sales. As such we don't see similar agreements very soon." Hong Kong has been the first mover for many of the mainland's market reforms. But the city also loses the exclusive status once Beijing expands the experiment to other markets. Beijing granted the first yuan-denominated qualified foreign institutional investors (RQFII) quota to Hong Kong in December 2011, allowing the city's financial firms to introduce offshore yuan funds investing in mainland stocks and bonds. But since 2013, Beijing has granted the RQFII quota to London, Singapore, Paris and Luxembourg. Fund managers have said it is vital that Hong Kong enjoys for some time the exclusive rights for cross-border fund sales, to attract international houses to domicile products here. Only funds domiciled in the city longer than a year and with over 200 million yuan of assets under management would be allowed to be sold on the mainland under the scheme.