Financial and Monetary Affairs | 91
Mainland rose to 16. Together,
to 16. Together, they had established 69 branches and 29 representative offices by the end of the year. Two Hong Kong banks with a total of five branches were allowed to conduct renminbi business while seven banks with a total of 45 branches were allowed to act as agents to sell insurance products.
CEPA also provides special advantages for the insurance sector. Hong Kong has taken a great step forward with the raising of the maximum allowed equity participation by Hong Kong insurers in a Mainland insurance company to 24.9 per cent, compared with 10 per cent for other foreign insurers. Hong Kong insurance companies also have greater opportunities to enter the Mainland insurance market through the formation of groups. CEPA also allows Hong Kong residents to work in relevant insurance services after they have obtained the Mainland's insurance qualifications and they are employed or appointed by a Mainland insurance institution.
In the accounting sector, under CEPA 1, Hong Kong accountants who have already qualified as Chinese Certified Public Accountants (Chinese CPAs) and practised on the Mainland (including partnership) are treated on a par with Chinese CPAs in respect of the requirement for annual residency on the Mainland. The Hong Kong Institute of Certified Public Accountants (HKICPA) and the Chinese Institute of Certified Public Accountants have implemented an agreement signed by the Government and the Mainland's Ministry of Finance in August 2004 regarding the exemption of professional examination papers of the two institutes' qualification programmes.
Following implementation of CEPA II on January 1, 2005, consultancy companies established by Hong Kong accountants are allowed to provide bookkeeping services on the Mainland. In addition the auditing experience acquired by Hong Kong accountants in Hong Kong is deemed as the same as that acquired on the Mainland for the application of a practising licence on the Mainland, and eligible Hong Kong residents are allowed to take the relevant Mainland accountancy qualification examinations.
CEPA III, to be effective from January 1, 2006, will provide further liberalisation measures. Under CEPA III, the validity period of the Hong Kong accounting firms' 'Temporary Business Permit' to conduct business on a temporary basis on the Mainland will be extended from one to two years.
Pan-Pearl River Delta Cooperation
In September, the Secretary for Financial Services and the Treasury led a delegation of more than 70 representatives from Hong Kong's financial services sector on a visit to Fujian Province. It was the first financial services delegation under the Pan-Pearl River Delta (Pan-PRD) Regional Co-operation Framework and included leading figures in the banking sector, venture capital investment funds, chambers of commerce, the securities industry and accounting and legal professions. The visit has enabled Hong Kong's financial services sector and entrepreneurs to have a better idea of the latest development and investment opportunities in Fujian, and enhanced