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to further develop as an international asset management centre. According to the Fund Management Activities Survey 2004 released by the SFC in July 2005, which covered licensed corporations and registered institutions, the combined fund management business had grown by 23 per cent from $2,947 billion in 2003 to $3,618 billion in 2004. Since the establishment of the SFC in 1989, the number of retail funds in Hong Kong had more than doubled from 781 to 1 933 in 2004, with a 15-fold increase in value from $283 billion to $4,300 billion. These findings again. confirmed Hong Kong's position as Asia's major asset management hub for investors worldwide.
To provide a conducive environment for the further development of Hong Kong as Asia's asset management centre, the Government abolished estate duty, with retrospective effect from July 15, 2005. In addition, the Government also proposed to exempt offshore funds from profits tax, so that Hong Kong's tax treatment of offshore funds will be on a par with other international financial centres such as the United States and the United Kingdom. The SFC also continued to review relevant codes and guidelines and facilitate the launch of new investment products and international funds' access to local market.
Improvement of the Securities and Futures Ordinance
The SFO came into force on April 1, 2003 and has been implemented successfully since then. During the year, the SFC continued to maintain and update the SFO in light of market developments.
The Government consulted the public on proposed amendments to the ordinance to give statutory backing to major listing requirements in January 2005. The proposed legislative amendments provide for sanctions for breaching the statutory listing requirements. In tandem with the Government's consultation, the SFC consulted the public on proposed amendments to the Securities and Futures (Stock Market Listing) Rules which would stipulate the statutory listing requirements. The proposed amendments to the SFO as well as the draft subsidiary legislation to be made by the SFC will be refined in light of the comments received.
Following consultation on a review of the disclosure of interests regime under Part XV of the SFO, the SFC recommended adoption of most of the proposals contained in the consultation paper to make filing easier, ease the operation of the de minimis exception and define change in the nature of interest. Legislative amendments will be proposed to implement the recommendations.
In early 2005, the SFC consulted the market on proposed amendments to Schedule 5 of the SFO, which aimed to fine-tune the legal definitions of certain regulated activities to accommodate the latest market development, including extending the definition of 'asset management' to include real estate investment scheme management. The amendments were gazetted in November and were to come into effect in January 2006.
The SFC concluded the consultation on a review of the level and funding of the Investor Compensation Fund in March 2005 and the amendments to the Securities and Futures (Investor Compensation Levy) Rules came into effect in October,