ENG-2014 — Page 101

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Financial and Monetary Affairs

investors, attracting orders exceeding US$4.7 billion. The transaction demonstrated that issuance of sukuk using Hong Kong's platform is a viable fund-raising option.

Financial Services Development Council

The Financial Services Development Council (FSDC), established by the government in 2013, published six reports in 2014, providing proposals on subjects including RMB and Mainland- related opportunities, fund-raising platforms, promotion and human capital. The government will continue to provide support for the work of the FSDC as a high-level cross-sectoral government advisory body in collecting views from the industry to formulate strategic proposals for the development of our financial services industry and advise the government on industry development.

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

Over the past few years, international financial centres have pursued 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. The government will continue to drive, facilitate and co-ordinate initiatives to ensure that the overarching framework would enhance protection for investors and promote market development in the face of both. global needs and local circumstances.

Basel III Implementation in Hong Kong

Hong Kong follows the international timeline of the Basel Committee on Banking Supervision (BCBS) for implementing the Base! III reform package. For the purpose of implementing the second phase of the reform package (covering a series of capital buffers and a new liquidity framework), amendments to the Banking (Capital) Rules, as well as the Banking (Liquidity) Rules, will take effect from 1 January 2015.

Regulation of OTC Derivatives

To introduce the OTC derivative regulatory regime, the Securities and Futures (Amendment) Ordinance 2014 was enacted by the Legislative Council in March. The SFC and the HKMA are preparing the related subsidiary legislation.

Development of an Effective Resolution Regime for Financial Institutions in Hong Kong According to the Key Attributes of Effective Resolution Regimes for Financial Institutions published by the Financial Stability Board in November 2011, relevant authorities are to be vested with the resolution powers in resolving financial institutions in an orderly manner and without exposing taxpayers to the risk of loss from solvency support, while maintaining continuity of their vital economic functions.

In order to meet the standards, it will be necessary for Hong Kong to vest in its relevant authorities the resolution powers set out in the Key Attributes for resolving financial institutions which are deemed systemically significant or critical if they fail. The first stage of public

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