Hong Kong Securities and Futures Commission's Leung Fung-yee: Actively advocating to include RMB counters in the southbound trading link, hoping to open by the end of the year.

On June 13, at the Caixin Summer Forum, the CEO of the Hong Kong Securities and Futures Commission, Ashley Alder, stated that they are actively considering including RMB counters in the Southbound trading link to increase RMB-denominated stock trading in Hong Kong, with the goal of launching before the end of the year. She pointed out that Hong Kong must continuously seek innovations, assess the situation, enhance existing competitiveness, and work on multiple aspects such as trading mechanisms and cost reduction to seek new growth points. She mentioned the clear trend of companies listing in both Mainland China and Hong Kong through the "A+H" dual listing method, with a number of Mainland companies coming to Hong Kong for their initial public offering, and Hong Kong optimizing the listing approval process and introducing the "Fasttrack" program. The Hong Kong Securities and Futures Commission is also in talks with high-quality Chinese companies interested in relisting in Hong Kong to provide convenience. She also mentioned that the Hong Kong Securities and Futures Commission had proposed a regulatory framework for virtual assets from an investor protection perspective back in 2018. Given the rise in the value of Bitcoin amid multiple cycles, geopolitical tensions, and digitalization, it has become an alternative asset and a tool for vying for financial dominance. She emphasized that Hong Kong adheres to the principle of regulating with the same business, same risks, and same rules, and apart from the licensed exchanges, they will also regulate over-the-counter trading and custody institutions in the next step. During her keynote speech, she further emphasized that market volatility has become the new norm in the current macroeconomic environment. As a regulatory body, the Hong Kong Securities and Futures Commission must adopt a flexible yet robust regulatory approach to ensure the resilience of the Hong Kong market and leverage its unique advantages to seize new opportunities. In essence, the strategy of the Hong Kong Securities and Futures Commission consists of a strong shield and three offensive arrows: the strong shield symbolizes the resilience of the market and financial institutions, while the offensive arrows represent targeted growth strategies aimed at unleashing the market's development potential. The first approach is to strengthen Hong Kong's core competitiveness as a top financing center and top asset and wealth management center. With the support of the China Securities Regulatory Commission, many A-share companies have listed in Hong Kong as H-shares over the past year, with strong performances. Recently, the H-share listing of Contemporary Amperex Technology raised a total financing amount as high as $5.3 billion, with cornerstone investors being international long-term funds. When global stock markets face liquidity shortages, Hong Kong plays its core role as a financing platform, creating conditions for Mainland companies to go global and tackle the challenges of global supply chain restructuring. The Hong Kong Securities and Futures Commission will continue to work closely with the Hong Kong Exchanges and Clearing to further attract diverse companies to list in Hong Kong, enhance international competitiveness, reduce trading costs, and improve market efficiency. The second approach focuses on deepening internal and external connectivity. As the main bridge between Mainland China and the rest of the world, this is what sets Hong Kong apart. Strengthening ties with emerging markets in Asia and mature markets in Europe and America will further enhance Hong Kong's international influence and diversification, opening up new growth paths. The connection between Mainland China and Hong Kong markets has been in place for over 10 years, with the focus remaining on deepening the integration of the two markets. The Hong Kong Securities and Futures Commission has made breakthroughs in the past, expanding the scope of connectivity from stocks and bonds to fund products, ETFs, and derivative instruments. In the future, the Hong Kong Securities and Futures Commission will actively promote the expansion and optimization of connectivity, such as including RMB counters in the Hong Kong Stock Connect. As a significant capital bridge, the Hong Kong market faces the world, and the Hong Kong Securities and Futures Commission is committed to enhancing ties with emerging markets in Asia. At the end of May, Hong Kong historically welcomed the listing of the first Saudi government bond ETF, expanding cooperation with the Saudi ETF market from stocks to fixed income, and is currently exploring more cooperation and innovation. The third approach is innovation in technology. Leveraging the power of this technological revolution, the Hong Kong Securities and Futures Commission aims to promote market and industry innovation in a responsible manner, to meet future challenges and maintain long-term competitiveness. This includes digitalization, blockchain technology, and generative AI. One specific example is the Hong Kong Securities and Futures Commission actively building a virtual asset ecosystem. This robust ecosystem must be compliant, risk-controlled, and sustainable to enable investors to seize new opportunities. The Commission supports the listing of ETFs on virtual assets and is expanding the scope, such as recently allowing pledging services for virtual assets. Another example is the Hong Kong Securities and Futures Commission's push for the industry to use blockchain technology to tokenize securities. Combining traditional finance with decentralized finance aims to establish a more efficient and resilient financial system, with the long-term goal of opening up vast opportunities for the financial industry, achieving instant settlement, and significantly reducing costs and improving efficiency in cross-border payment scenarios. In terms of IPO financing, the Hong Kong Securities and Futures Commission and the Hong Kong Exchanges and Clearing have previously launched the "Fasttrack" program to facilitate tech and biotech companies to list in Hong Kong and allow them to submit applications in a confidential manner without prematurely disclosing operational strategies and listing plans. The Commission is confident that the new measures will further assist the country in achieving its strategic goal of technological self-reliance.