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Financial and Monetary Affairs
the international standards through amending the Banking Ordinance and issuing rules. supplemented by regulatory guidance. The Banking (Capital) Rules were amended in 2020 to implement the latest Basel capital standard on counterparty credit risk.
Financial Infrastructure
Real-time Gross Settlement Systems
Hong Kong has robust real-time gross settlement (RTGS) interbank payment systems. All banks in the city maintain settlement accounts with the HKMA in the HKD RTGS system. The USD, euro and Renminbi (RMB) RTGS systems enable transactions in these currencies to be settled in real time among banks. All four RTGS systems are linked to enable forex transactions to be settled on a payment-versus-payment basis.
Central Moneymarkets Unit
The HKMA's Central Moneymarkets Unit (CMU) provides clearing, settlement and custodian services for EFBNs, government bonds and other HKD or foreign currency public and private debt securities. Through its seamless interface with the RTGS systems, the CMU system is able to settle securities transactions on a delivery-versus-payment basis. It is linked to a number of international and regional central securities depositories to enable overseas and local investors to hold and settle securities lodged with the CMU and with overseas systems respectively. Northbound trading of Bond Connect, which allows overseas investors to access the Mainland interbank bond market through Hong Kong, has experienced increasing usage since its launch in July 2017.
Besides debt securities, the CMU provides a standardised and automated platform for the investment fund industry to streamline the handling of investment fund order instructions.
Stored Value Facilities and Retail Payment Systems
The Payment Systems and Stored Value Facilities Ordinance provides the regulatory regimes for stored value facilities (SVFs) and retail payment systems (RPSs). As at end-2020, the HKMA had issued 15 SVF licences, in addition to which three banks had rolled out SVFs. The HKMA oversees six RPSs designated in accordance with the ordinance.
Faster Payment System
There are 35 banks and 12 SVFs participating in the Faster Payment System (FPS). As of 31 December, the FPS had recorded 6.88 million registrations and processed 170 million real-time transactions since its launch in 2018, involving transaction amounts of around HK$2,100 billion and RMB36 billion. In December, the HKMA launched a new feature to allow users to link their Hong Kong identity card (HKID) number to their bank account for receiving funds via the FPS from institutions which already possess the recipients' HKID number, making the transfer of funds more expeditious and flexible.
6 Banks may obtain intra-day and overnight liquidity through repurchase agreements with the HKMA using EFBNs as
collateral.
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