ENG-2012 — Page 96

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Financial and Monetary Affairs

Asset Management and Private Wealth Management

Hong Kong with its strong asset management foundation and world-class financial infrastructure benefits greatly from the huge demand for wealth and asset management services in the Mainland and Asia. Thanks to the continuing inflows of investment capital into the Asia-Pacific region, Hong Kong is also well placed to become Asia's premier asset management centre. The city's combined fund management business was valued at $9,038 billion at the end of 2011, about 63 per cent of which came from non-Hong Kong investors, underlining the city's strong appeal to foreign investment capitals. At the end of 2012, there were 101 approved fund management groups managing 1,842 unit trusts and mutual funds authorised by the Securities and Futures Commission (SFC).

In 2012 the Government, together with other agencies, continued to explore ways to improve the international competitiveness of Hong Kong's financial markets and provide a more favourable operational, regulatory and tax environment. The Government led a promotion campaign in New York, Zurich, Geneva and Lugano to showcase Hong Kong's status as China's global financial centre and to help promote Hong Kong as a premier asset management hub in the region. The HKMA also discussed with market participants improvements to the regulatory regime for private banking business and investor protection, introduced revised measures for the sale of investment products to private banking customers, and provided guidance and clarification to facilitate the adoption of 'portfolio-based' assessment of the suitability of investment solicitation and recommendation for private banking customers.

Enactment of the new Companies Ordinance

In July 2012, the Legislative Council enacted the new Companies Ordinance, which is expected to be implemented in early 2014. It will provide a modernised legal framework for the incorporation and operation of live companies in Hong Kong. The new regime seeks to enhance corporate governance, ensure better regulation, facilitate business and modernise the law, thereby consolidating Hong Kong's status as a major international business and financial

centre.

To encourage investors to set up companies in Hong Kong to raise capital and expand their business, the capital duty levied on local companies under the Companies Ordinance was abolished with effect from 1 June 2012.

Improvement of Corporate Insolvency Law

The Government has launched an exercise to improve the corporate insolvency provisions under the Companies Ordinance. Its objectives are to facilitate more efficient administration of the winding-up process and increase protection of creditors through streamlining and rationalising the company winding-up procedures and enhancing regulation of the winding- up process having regard to international experience. An Advisory Group comprising representatives from the business and financial sectors, relevant professions, the academic sector and members of the Standing Committee on Company Law Reform was established in early 2012 to provide technical input and expert advice to the Government on the legislative

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Figures are quoted from the Fund Management Activities Survey for 2011, a survey conducted by the SFC annually to collect information and data on the general state of affairs in the local fund management industry.

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