ENG-2013 — Page 98

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Financial and Monetary Affairs

competitiveness, strengthen corporate governance, and improve investor protection. The government plans to introduce a bill into the Legislative Council in the second quarter of 2014 to provide the regulatory framework for the uncertificated securities market regime.

Asset Management and Private Wealth Management

The city's combined fund management business was valued at $12,587 billion at the end of 2012, about 65 per cent of which came from non-Hong Kong investors, indicating that overseas investors see Hong Kong as an attractive investment platform. At the end of 2013, there were 1,908 unit trusts and mutual funds authorised by the SFCS.

To enhance the operational, regulatory and tax environment for fund managers in Hong Kong, the Financial Secretary announced in the 2013-14 Budget a number of measures to further develop the business, including a proposal to allow private equity funds to enjoy tax exemption as offshore funds, and an initiative to introduce a legal and regulatory framework for the open- ended investment company as a legal form of funds to be domiciled in Hong Kong.

The Private Wealth Management (PWM) Association, established by the PWM industry in 2013 to promote proper conduct, integrity and professional competence of PWM practitioners, has been working closely with the regulators and professional training institutes in developing a framework covering the requisite level of competence and on-going professional development of PWM practitioners.

Trust Law Reform

Hong Kong's reformed trust laws came into effect on 1 December 2013, enhancing Hong Kong's status as an international asset management centre and giving Hong Kong a competitive edge over other major common law jurisdictions by enabling settlors to establish perpetual trusts in Hong Kong and ensuring that the allocation of the assets of trusts set up in Hong Kong would not be affected by other jurisdictions' forced heirship rules.

Preparing for Implementation of the new Companies Ordinance

Following the 2012 enactment of the new Companies Ordinance, which will provide a modernised legal framework for the incorporation and operation of companies in Hong Kong, the remaining 12 pieces of subsidiary legislation were enacted in 2013. 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. In preparation for the new ordinance's commencement on 3 March 2014, the Companies Registry upgraded its IT system, reviewed its procedures and forms and carried out a series of promotional and educational activities (including issuing circulars, pamphlets and guidelines and conducting briefings) to enhance public awareness of the major changes introduced by the new ordinance.

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Figures are quoted from the Fund Management Activities Survey for 2012, a survey conducted by the SFC annually to collect information and data on the general state of affairs in the local fund management industry.

It includes 116 MPF pooled investment funds offered both as retail unit trusts and for mandatory provident fund purposes.

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