Hui Ching-yu: Hong Kong Gold Settlement to Connect to Currency Settlement System by Year-End; "Gold Express Lane" to Be Set Up to Speed Up Onboarding of Gold Traders

Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, said in a media interview that the Hong Kong Gold Settlement Corporation will be connected to the currency settlement system by the end of this year, and a "Gold Express Lane" will be set up to coordinate among different policy bureaus and speed up the onboarding of gold-related enterprises in Hong Kong. Hui pointed out that there are still several months to go before the Hong Kong Gold Settlement Corporation officially begins operation, and the company will still make good use of the time to complete more preparations before the end of the year, including promoting RMB gold futures contracts, establishing an industry association, and enhancing settlement functions. The trial operation mainly involves physical gold settlement, and by the end of the year it will be connected to currency settlement, including the interbank currency system to achieve delivery versus payment, with both physical settlement and cash settlement. He continued that the authorities will set up a "Gold Express Lane" to assist mainland and overseas gold merchants and smelters in coming to Hong Kong to expand gold-related businesses. It is hoped that after the authorities contact these enterprises, if there is genuine demand or a concrete plan, the Hong Kong Treasury Bureau will coordinate and the relevant policy bureaus on land use and approval work, so that enterprises can establish a presence in Hong Kong faster and more easily. Regarding the Securities and Futures Commission's target of formally including the RMB trading counter for Hong Kong stocks in Stock Connect before July next year, Hui believes the measure will help increase incentives for enterprises to issue RMB-denominated shares in Hong Kong. Connecting the RMB counter to the country's largest onshore RMB liquidity pool will bring great convenience for mainland investors to directly use RMB to buy Hong Kong RMB-denominated stocks, and will also generate greater liquidity. The National Financial Regulatory Administration allows mainland insurance funds to invest in Stock Connect ETFs. Hui pointed out that the relevant policy was officially implemented at the end of September, and he believes the new arrangement is of particularly positive significance to the development of Hong Kong's ETF market.