No need to revamp regulations to turn Hong Kong into a fintech hub, says government report
Authorities to set up teams to help develop sector
Existing regulations are adequate to handle the challenges from the growing financial technology (fintech) sector in Hong Kong, including crowdfunding and peer-to-peer lending, a government report says.
The steering group on financial technologies (fintech), which was established in last year’s budget, recommended closer dialogue between regulators and fintech start-ups, but found current laws were appropriate to regulate the new technologies.
“I do not anticipate that we need to change the regulatory regime so much, I think that we need to facilitate communication between the companies, big and small, and the regulators,” Secretary for Financial Services and the Treasury Professor Chan Ka-keung, the chairman of the steering group, said. “I don’t think the regulatory regime is stopping any development in fintech.”
Fintech has been highlighted as a potential growth area for the city based on its existing financial expertise, although critics have said regulations have been slow to adapt to new technology and business models.
Under the SFO, there are restrictions on inviting the public to purchase shares, debt instruments or to join collective investment schemes.
A report released this week by accounting firm EY on fintech in Britain found regulators in Hong Kong were viewed as complex, conservative and in some cases opaque.
Simon Loong, chief executive of online lender WeLab, a local start-up with 2.5 million customers in Hong Kong and mainland China, said the fintech industry was looking for more dialogue and clarity on regulation.
“Whether there can be a small-scale test or tweaks to certain regulations to enable us to try it first so at least we can learn about how these business models work in the Hong Kong context,” Loong said.
To allow discussion between fintech companies and regulators, the Hong Kong Monetary Authority, the Securities and Futures Commission and the Office of the Commissioner of Insurance will develop dedicated contact points and teams, the report said.
The report laid out plans to develop Hong Kong into a regional fintech hub, including encouraging young people into the sector, improving knowledge of available funding and increasing the number of fintech start-ups in Cyberport incubation schemes to 150 over the next five years.
The report found 48 of the top 100 global fintech companies had operations in Hong Kong, and recommended the city develop an annual fintech event and competition to attract further interest in the sector from overseas.
InvestHK will set up a fintech team to help start-ups and financial institutions develop their companies, research and development or accelerators in the city.