Hong Kong Securities and Futures Commission "Quarterly Report": Hong Kong continues to deepen its connection with the Mainland, solidifying its advantages as China's international asset gateway.

On August 26, the Hong Kong Securities and Futures Commission (SFC) published its "Quarterly Report," revealing that Hong Kong's capital market experienced strong growth once again in the face of global market fluctuations. Key highlights include breakthroughs in offshore products, continued inflow of funds into the Stock Connect, and a thriving environment for initial public offerings (IPOs). In the quarter ending in June, Hong Kong, as the external gateway to the mainland market, made positive progress in various aspects. The SFC approved the Hong Kong Exchanges and Clearing Limited to launch a five-year treasury futures product, which commenced trading in early August. As the only offshore Chinese treasury futures product available, this futures contract attracted a diverse range of investors, further strengthening Hong Kong's role as a hub for risk management of Renminbi (RMB) assets and aiding in the internationalization of the RMB. The Swap Connect trading remained active, with an average daily trading volume soaring by 50% year-on-year, while the total trading value of RMB interest rate swap contracts exceeded 13.3 trillion RMB. During the quarter, the Stock Connect recorded net capital inflows for 34 consecutive months, setting a new all-time record for the longest continuous streak. Cumulatively, since its launch, net capital inflows exceeded 5.4 trillion HKD, with the average daily trading volume of Stock Connect accounting for 22% of total trading in the Hong Kong market. The new stock market continued to thrive during the quarter, with the amount raised increasing by 12% year-on-year to approximately 100 billion HKD. Nine A-share listed companies raised over 50 billion HKD through H-share IPOs. Notably, fundraising by specialized technology companies and biotechnology companies surged by 420% year-on-year. To further solidify Hong Kong's role as a super connector, the SFC announced a series of measures to deepen market cooperation with the China Securities Regulatory Commission (CSRC) in August. The SFC also signed a memorandum of understanding with the Securities Commission of Malaysia in July to expand fund and dual listing cooperation. SFC Chairman Dr. Danny O. stated, "In supporting the high-quality development and high-level opening of the mainland financial market, Hong Kong carries a unique and crucial mission. In the future, Hong Kong will continue to deepen the connections between the mainland and global markets, while building market resilience and contributing greater strength to the country's goal of becoming a financial powerhouse." SFC Chief Executive Ms. Ashley A. remarked, "In the past quarter, Hong Kong demonstrated the vibrant vigor of a leading international financial center, thanks to the continuous deepening of cross-border cooperation and active fundraising activities. The SFC will continue to enhance relevant measures with a balanced approach that considers both investor protection and market innovation, further solidifying Hong Kong's unique position as the primary gateway to the Chinese market." In asset management, the SFC recognized that exchange-traded funds (ETFs) and leveraged and inverse products recorded strong growth, with a total market value increasing by 43% year-on-year to 756.3 billion HKD as of the end of June. Subsequently, in July, the SFC optimized the regulatory framework for leveraged and inverse products, allowing product providers greater flexibility while promoting investors' further understanding of the characteristics of such daily trading products. Other key points include: a) The total assets under management of 15 tokenized retail products amounted to 10.3 billion HKD, representing a year-on-year increase of 280%. The combined market value of 11 virtual asset spot ETFs rose by 55% since their launch, reaching 451 million USD. b) The SFC received 2,456 license applications during the quarter, an increase of 9% year-on-year. As of the end of June, the total number of licensed institutions and individuals rose by approximately 5% year-on-year. c) In April, the SFC successfully facilitated compensation from auditors for false and misleading financial statements, reaching an agreement with the auditors of a defunct company. The auditors will reserve 1 billion HKD for compensation to independent minority shareholders. d) Regarding the operational practices of certain brokers in opening accounts for mainland investors, the SFC completed a thematic review during the quarter and issued a circular providing guidance on additional account-opening measures. e) The official Xiaohongshu account of the SFC has received a positive response since its launch in April, with the number of followers steadily increasing to over 22,000, helping to raise public awareness of fraud prevention.