Xu Zhengyu: Taking multiple measures to promote the development of the fund industry in Hong Kong, the industry scale is gradually expanding.

On February 12, Secretary for Financial Services and the Treasury of Hong Kong, Christopher Hui, stated during a meeting with lawmakers that the Hong Kong government has been implementing various measures to attract more global funds to be managed in Hong Kong, in order to promote the comprehensive development of the fund industry in Hong Kong. Specific measures include actively deepening the interconnection between the Mainland and Hong Kong financial markets, expanding the range of eligible products for stock exchange-traded funds under the "Stock Connect" program, among others. The Hong Kong Monetary Authority has also further optimized the expansion of the southbound Bond Connect arrangement and diversified various financial products. In addition, the comprehensive fund platform developed by the Hong Kong Stock Exchange will help lower the entry barriers for the fund industry, expand the distribution network of Hong Kong funds, and improve market efficiency. Hui pointed out that the Hong Kong government has been committed to promoting the development of offshore RMB business in Hong Kong, and actively deepening the interconnection between the Mainland and Hong Kong financial markets. The China Securities Regulatory Commission announced a series of measures in April 2024 to expand the interconnection between the Mainland and Hong Kong capital markets, including expanding the range of eligible products for stock exchange-traded funds under the "Stock Connect" program, and including real estate investment trusts in the "Stock Connect" program, all of which support the Hong Kong financial market in offering more attractive investment products, providing more investment opportunities for domestic and foreign investors, and consolidating Hong Kong's position as a center of offshore RMB business. Furthermore, in collaboration with the People's Bank of China, the Hong Kong Monetary Authority announced on January 13, 2025, further optimization and expansion of the southbound Bond Connect arrangement, the development of offshore RMB repurchase transactions using northbound Bond Connect bonds as collateral, using northbound Bond Connect bonds as collateral for the performance of Hong Kong off-exchange settlement companies, promoting convenient payments between the two regions, and facilitating financial services in the Greater Bay Area. In terms of financial products, in addition to RMB foreign exchange products, Hong Kong also offers a variety of offshore RMB investment products and services, including RMB-denominated stocks, exchange-traded funds, real estate investment trusts, precious metals futures, and more. Since its launch in September 2021, the Cross-Border Wealth Management Connect has been steadily developing, and "Wealth Management Connect 2.0" has been further optimized, including the requirement for individual investors, lowering the participation threshold for the southbound Connect, expanding the range of participating institutions, adding compliant securities firms as participating entities, expanding the range of eligible investment products, and further optimizing publicity and sales arrangements. The Mainland and Hong Kong Mutual Recognition of Funds (MRF) scheme has been effective since July 2015, and by the end of 2024, a total of 83 funds have been recognized by the regulatory authorities of both regions, with a total net subscription of approximately 43.5 billion RMB. The scheme was optimized starting on January 1, 2025, including relaxing the distribution ratio limits for recognized funds and allowing Hong Kong-recognized funds to transfer investment management functions to overseas asset management institutions within the same group. These measures will significantly increase the diversity of fund products, enhance fund sales volume, and have a positive impact on the sales of Hong Kong MRF funds in the Mainland. Moreover, the comprehensive fund platform developed by the Hong Kong Stock Exchange will help lower the entry barriers for the fund industry, expand the distribution network of Hong Kong funds, and improve market efficiency. The first phase of the platform (Fund Database) was launched in December 2024, allowing investors to access information on fund investment options. Other services of the platform will be launched gradually starting this year, including the purchase and redemption of funds recognized by the China Securities Regulatory Commission (including MRF funds), payment settlement, and holding fund shares functionality.