ENG-2010 — Page 123

Financial and Monetary Affairs 81

investment banking services for mergers and acquisitions, and consultancy on restructuring.

HKEX and the Shanghai Stock Exchange (SSE) agreed in January 2010 on new co-operation initiatives, including strengthening exchanges and co-operation on information technology, product development, listing compliance and monitoring, etc. The HKEX and the SSE signed a Closer Co-operation Agreement in January 2009. The two parties have since started a market data collaboration programme, shared information on ETF and conducted mutual training programmes. The HKEx also maintained close relationship with the Shenzhen Stock Exchange via exchanges of executives and mutual training programmes.

Development of Offshore RMB Business

Benefiting from China's policy to promote greater use of the RMB in external trade and investment, Hong Kong demonstrated tremendous growth in offshore RMB business in 2010.

The RMB trade settlement pilot scheme was launched on July 6, 2009 and expanded on June 22, 2010. The expanded pilot scheme covers 20 provinces and cities in the Mainland, and their trade transactions with any part of the world can be settled in RMB. Any enterprises in the relevant Mainland provinces and cities can settle their merchandise imports, service trades and other current account transactions in RMB, while an expanded list of eligible enterprises are able to settle their merchandise exports in RMB. On December 6, 2010, the Mainland authorities expanded further the list of Mainland enterprises eligible under the scheme. The number of Mainland enterprises that can settle merchandise exports in RMB increased from 365 to 67 359. At the end of 2010, 153 banks, including 43 overseas banks, had become Participating Banks of Hong Kong's RMB clearing platform. In 2010, the amount of RMB trade settlement conducted through Hong Kong amounted to RMB 369 billion.

Also, Hong Kong is the first place outside the Mainland that has developed an RMB bond market. By the end of 2010, there had been 29 RMB bond issues (with a total issuance size of RMB 73.8 billion). In 2010, there was a significant expansion in the range of issuers, from Mainland banks to Hong Kong and international corporations.

Following the revision of the Clearing Agreement signed between the People's Bank of China (PBOC) and the Clearing Bank for RMB Business in Hong Kong (Bank of China (Hong Kong) Limited) in July 2010, all companies and organisations, including all types of financial institutions, can open RMB accounts at banks. Restrictions on RMB interbank transfers between personal accounts and corporate accounts have been removed, enabling the financial industry to launch different RMB financial and wealth management products including insurance, equities, and investment funds.

Separately, in August 2010, the PBOC promulgated a notice on a pilot scheme for eligible institutions, including the Clearing Bank and Participating Banks of Hong. Kong's RMB clearing platform to invest in the Mainland's interbank bond market.