Financial and Monetary Affairs 79
corporate rescue procedure. The Government plans to launch a public consultation on the legislative proposals in late 2012.
Trust Law Reform
Based on the consultation conclusions on the review of the Trustee Ordinance and related matters issued in February 2010, the Government has been preparing an Amendment Bill to introduce the reform proposals. The bill will provide a better framework for the operation of trusts in Hong Kong, strengthen the competitiveness of Hong Kong's trust services industry and enhance Hong Kong's position as a major asset management centre. The Government plans to consult the stakeholders on the detailed legislative proposals in the first quarter of 2012.
Enhancement of the Financial Infrastructure
Hong Kong has a robust real time gross settlement (RTGS) interbank payment system. All banks in Hong Kong maintain settlement accounts with the Hong Kong Monetary Authority (HKMA) through the Hong Kong dollar RTGS system. All RTGS payment transactions are settled in real time. The banks may obtain intra-day liquidity through intra-day repurchase agreements with the HKMA using the Exchange Fund Bills and Notes (EFBNs) as collateral.
US dollar, euro and RMB RTGS systems also enable transactions in these currencies to be settled in real time, reducing or eliminating settlement risk. RTGS systems in Hong Kong are linked to enable foreign exchange transactions to be settled on a payment-versus-payment basis.
The HKMA operates a Central Moneymarkets Unit (CMU) to provide clearing and custodian services for EFBNs and other Hong Kong dollar or foreign-currency private debt securities. It is linked to a number of international and regional central securities depositories to enable overseas investors to trade CMU securities.
Through its integration with the RTGS system, the CMU enables securities to be settled on a delivery-versus-payment basis, enhancing settlement efficiency and eliminating settlement risk. The interface also enables users of the RTGS system to access intra-day liquidity through automatic intra-day repurchase agreements.
Major projects in 2011 included:
• Completion of a series of enhancements of the RMB RTGS system to support further expansion of RMB business in Hong Kong;
• Continued development of a proposed local trade repository for OTC derivatives transactions;
• Continued development of the Pilot Platform and add-on services to facilitate cross-border transactions and collateral management in bonds; and
• Completion of a review of the retail payment instruments and infrastructure in Hong Kong and overseas, with recommendations to improve the efficiency of the retail payment infrastructure in Hong Kong.