ENG-2014 — Page 104

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Financial and Monetary Affairs

Day attended by over 200 participants from professional bodies and interested individuals. The centre also promoted its alternative dispute resolution services at a large-scale exhibition for

investors.

Hong Kong as China's Global Financial Centre - Financial Co-operation with the Mainland

Capital Formation Centre and Global Investment Platform for the Mainland

Hong Kong's fundamental strengths make it an ideal provider to Mainland enterprises of top class investment banking services for mergers and acquisitions as well as consultancy on restructuring. The growing presence of Mainland companies listed on the SEHK in turn has increased the breadth and depth of Hong Kong's securities and futures markets through a greater diversity of constituent stocks in the equity market and a wider range of products. Mainland enterprises also raise capital in Hong Kong through the issuance of bonds, project financing and loan syndication.

Development of Offshore RMB Business

The offshore RMB business in Hong Kong registered robust growth in 2014. Hong Kong's RMB liquidity pool has expanded steadily. At the end of 2014, the RMB customer deposits and outstanding RMB certificates of deposit issued amounted to RMB1,004 billion and RMB155 billion respectively, totalling RMB1,158 billion, up 10 per cent compared with RMB1,053 billion at the end of 2013. Banks in Hong Kong handled RMB trade settlement of RMB6,258 billion in 2014, representing a 63 per cent growth as compared to 2013.

Hong Kong's role as a platform to support global RMB payments has been deepening. The RMB Clearing Bank in Hong Kong extended its service hours from 15 hours (HKT 8.30am - 11.30pm) to 20.5 hours (HKT 8.30am - 5.00am of the next day), giving financial institutions in the European and American time zones an extended window to settle offshore RMB payments through the Hong Kong infrastructure. In 2014, the average daily turnover of Hong Kong's RMB RTGS system amounted to RMB733 billion. At the end of 2014, there were 225 banks participating in the RMB clearing platform in Hong Kong, of which 200 were branches and subsidiaries of foreign banks and overseas presence of Mainland banks, forming a global RMB payment network covering over 40 countries and regions. According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Hong Kong handled around 70 per cent of global RMB payments.

Hong Kong is also the world's largest offshore RMB investment product market. A wide range of RMB products (including investment funds (both listed and unlisted), insurance products, currency futures, real estate investment trusts, shares and derivative products) are available in the market. Qualified institutions continued to show interest in developing Renminbi Qualified Foreign Institutional Investor (RQFII) products in Hong Kong. The number of RQFII fund management companies managing SFC-authorised RQFII funds increased from 24 at the end of 2013 to 38 at the end of 2014. In January 2014, the SFC authorised the world's first physical RQFII bond ETF tracking an onshore Mainland government bond index, and in February 2014, it authorised the first RQFII money market fund. The first RQFII A-share ETF managed by a subsidiary of a Mainland securities company was also authorised in February. At the end of 2014, there were 65 SFC-authorised RQFII unlisted funds with an aggregate net asset value of

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