Recent years have seen significant strides in the evolution of Hong Kong's financial services sector. The Legislative Council (LegCo) Secretariat has published an insightful Policy Pulse report, underscoring the city's advancements and strategic initiatives aimed at solidifying its position as a leading international financial hub.

Elevating Hong Kong's Financial Landscape to Unprecedented Heights

The Policy Pulse report highlights several key achievements that underscore Hong Kong's status as a global financial leader. Notably, it ranks among the world's freest economies and holds the top spot for investment environment. Moreover, it stands out as the largest offshore Renminbi (RMB) business center globally. These accolades reflect the robust foundation upon which Hong Kong's financial services industry thrives.

Pioneering Policies and Strategic Measures

The government and relevant financial institutions have introduced a series of policies to bolster various segments of the financial sector. In asset and wealth management, new measures aim to attract more family offices and enhance the competitiveness of real estate investment trusts. For fundraising platforms, initiatives focus on creating a more conducive environment for companies to list and raise capital in Hong Kong. Mutual market access between the Mainland and Hong Kong has been strengthened, fostering greater integration and opportunities.Furthermore, the emphasis on international risk management has led to the development of innovative products and services. Fintech is receiving substantial support through the establishment of a subcommittee dedicated to reviewing Web3 and virtual asset technologies. Green and sustainable finance is also gaining momentum, with policies promoting environmentally friendly investments.

Legislative Milestones and Future Directions

LegCo has made notable legislative strides to reinforce Hong Kong's financial competitiveness. Two tax-related bills passed in 2023 and 2024 have facilitated the growth of family office businesses and enhanced the attractiveness of real estate investment trusts. Additionally, the reduction of stamp duty on stock transfers to 0.1% aims to boost the liquidity and competitiveness of the stock market.Looking ahead, the Bills Committees are examining the Companies Amendment (No. 2) Bill 2024 and the Stablecoins Bill. The former seeks to streamline the process for overseas companies to re-domicile in Hong Kong, while the latter aims to establish a licensing regime for fiat-referenced stablecoin issuers. These measures will further fortify Hong Kong's regulatory framework and attract more innovative financial entities.

Driving Innovation and Expanding Opportunities

Members of LegCo have proposed several initiatives to deepen and broaden Hong Kong's role as a fundraising platform. Encouraging listed companies to issue RMB-denominated stocks and advocating for further relaxation of Southbound Trading under Stock Connect are key strategies. Implementing a tiered stamp duty system for stock trading could increase market liquidity. Additionally, there is a push to attract global companies listing in Hong Kong, particularly those focused on emerging investment themes.Concerns about the development of the RMB offshore business have prompted calls for increased issuance of offshore RMB bonds, equity, and risk management products. Addressing these areas will not only enhance Hong Kong's financial ecosystem but also strengthen its position as a premier destination for investors and businesses alike.