ENG-2014 — Page 98

Chart 9

HK$ Billion

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Financial and Monetary Affairs

Total NAV of MPF Schemes

565

514

400

440

365

356

200

0

2010

2011

2012

Year

2013

2014

Product Offerings in Commodity Trading

Hong Kong operates one of the most active physical gold markets in the world and is one of Asia's largest over-the-counter gold trading centres. Spot gold can be traded through two closely related yet independent markets in the city: the Chinese Gold and Silver Exchange Society and the Loco London gold market. The society provides trading of both tael and kilo bars3. Prices track closely those in the major gold markets in London, Zurich and New York.

In addition to operating Hong Kong's securities and derivatives markets, HKEx also owns the London Metal Exchange (LME), the world centre for industrial metals trading and price-risk management. More than 80 per cent of global non-ferrous business is conducted on the LME and its prices are used as the global benchmarks. Daily volumes on the LME hit a fresh record high in 2014, rising 3.5 per cent to 700,204 lots from the previous year's 676,238 lots. The LME launched an in-house clearing house in London in September, LME Clear, to support the LME's commodity business.

Major Initiatives in 2014

Continuous efforts were made to enhance Hong Kong's competitiveness as an international financial centre. The government continues to work closely with regulators and the industry to align with the international regulatory reform agenda to promote stability of the financial system, improve market quality and strengthen investor protection. It also continues to press ahead with various initiatives to consolidate Hong Kong's leading role as the Asia-Pacific region's asset management centre, advance financial co-operation with the Mainland, further develop offshore RMB business and enhance the functions of its funding platform.

Enhancing Hong Kong's Competitiveness as an International Financial Centre To build on Hong Kong's strength as China's global financial centre, the government has been working to enhance the quality of the local financial markets and increase their depth and breadth, to keep abreast of local and international developments and to further optimise Hong Kong's regulatory framework. The financial services industry also provides a catalyst for the

3

Tael bars are of 99 per cent fineness and weighted in taels (one tael equals approximately 1.20337 troy ounces). Kilo bars are of 999.9 parts per thousand fineness and weighted in kilograms.

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