ENG-2013 — Page 99

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Financial and Monetary Affairs

Improvement of Corporate Insolvency Law

The government conducted public consultation on a package of legislative proposals to improve the corporate insolvency law in mid-2013. The proposals seek 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. The government plans to introduce an amendment bill into the Legislative Council in the 2014-15 legislative session.

Development of the Bond Market

The Government Bond Programme (GBP) was established in 2009 to promote the further and sustainable development of the bond market in Hong Kong. In May, the Legislative Council passed a resolution raising the borrowing ceiling under the GBP from $100 billion to $200 billion providing further room for the on-going implementation of the GBP.

Bonds totalling $20 billion were issued to institutional investors under the GBP in 2013, attracting a diverse group of investors. In June, the government issued a $10 billion inflation- linked retail bond (iBond), with a tenor of three years, for the third time under the GBP to Hong Kong residents to promote further development of the retail bond market in Hong Kong. At the end of 2013, outstanding HKD debts, including Exchange Fund Bills and Notes, totalled $1.42 trillion.

Developing Islamic Finance

The government continued to create an environment conducive to the development of Islamic finance in Hong Kong in collaboration with the financial regulators and the private sector. The Inland Revenue and Stamp Duty Legislation (Alternative Bond Schemes) (Amendment) Ordinance 2013, providing a tax framework for Islamic bonds (sukuk) comparable to that for conventional bonds, was enacted by the Legislative Council in July 2013.

Establishment of the Financial Services Development Council

The government established the Financial Services Development Council (FSDC) in January 2013 as a high-level and cross-sectoral advisory body to engage the industry and formulate proposals to promote the further development of Hong Kong's financial services industry and map out the strategic direction for development. In November the FSDC released six research reports containing proposals on the strategic development of Hong Kong's financial services. industry.

Alignment with International Agenda, Improving Market Quality and Financial Consumer Education and Protection

Following the global financial crisis in 2008, a number of international financial centres have pledged to pursue a series of regulatory reform initiatives under the G20 agenda to enhance the resilience and stability of the global financial system. These include Basel III implementation, regulation of the over-the-counter (OTC) derivative market and establishment of effective resolution regimes.

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