Securities and Futures Commission of Hong Kong, Leung Chung-yin: Hong Kong has already become one of the largest over-the-counter derivatives markets in Asia.

On September 17, Mr. Leung Chung Yin, Executive Director of the Market Surveillance Department of the Securities and Futures Commission of Hong Kong, delivered a keynote speech at the 2025 FOW Trading Asia Conference, stating that after decades of vigorous development, Hong Kong's derivative product market has not only become an important part of the local financial system, but also a major source of growth in the Asian market. It is worth noting that Hong Kong has become one of the largest over-the-counter derivative product markets in Asia, especially in the areas of RMB foreign exchange and interest rate derivative products. The trading volume and number of outstanding contracts in Hong Kong's derivative product market have more than doubled in the past decade, demonstrating the depth and liquidity of the market. Just last year, the daily trading volume of derivative product contracts on Hong Kong's exchange reached a historic high. Mr. Leung stated that the strong growth mentioned above was mainly driven by trading in three flagship products, namely the Hang Seng Index futures, Hang Seng H-Share Index ETF futures, and the Hang Seng Tech Index futures. The strong demand from investors for individual stock options and offshore RMB futures (i.e. RMB foreign exchange futures) has further propelled this growth. Since 2015, these products have collectively contributed to about 90% of the total trading volume of derivative products in Hong Kong. The continued opening of the mainland market is also a strong growth driver, allowing Hong Kong to consolidate its role as a "super-connector" between China and international markets. Over the years, as overseas investors increasingly use Hong Kong as a gateway to access the mainland market, Hong Kong has become a leading risk management center for inbound investments from the mainland, as well as a major offshore RMB derivative product market. He mentioned that Asia has always been a focus in the global derivative product market, with its market share continuously rising and showing impressive growth: according to data from the Futures Industry Association of the U.S., Asia's market share in the global derivative product market surged from 49% in 2021 to 82% in 2024, with contract trading volume increasing by 4.5 times to 169.2 billion contracts over a period of three years. In contrast, the market share of the other two major regions declined during the same period. The outperformance of the Asian market compared to other regions can be attributed to various factors, including the rapid development of emerging markets such as India in recent years, as well as the increasing demand from investors to hedge using derivative products. Mr. Leung also mentioned that the launch of the Mutual Market Connectivity Mechanism has been a significant milestone for derivative products. With the steady increase in overseas investors' investment in the mainland bond market, the launch of the Mutual Market Connectivity in May 2023 facilitated the participation of investors in the onshore RMB interest rate swap market. The Mutual Market Connectivity provides a new channel for investors to hedge risks in their mainland bond holdings. He mentioned that the Mutual Market Connectivity mechanism has been effective since its introduction: as of the end of August this year, the total nominal principal amount of transactions exceeded 8.1 trillion RMB, equivalent to an average of about 145 billion RMB per day, accounting for about 10% of the trading volume in the onshore interest rate swap market. This year, the Hong Kong Securities and Futures Commission also extended the maximum term of Northbound swap contracts from 10 to 30 years, making the product range more diverse. He stated that this measure will provide international investors holding long-term RMB government bonds with effective tools for managing and hedging related risks. The Hong Kong Securities and Futures Commission has been committed to strengthening Hong Kong's role as an efficient bridge to the mainland market and an offshore risk management hub, and will continue to work with relevant authorities in the mainland and HKEX to introduce more optimization measures.