ENG-2016 — Page 97

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Financial and Monetary Affairs

The city will capitalise on opportunities arising from the implementation of the National 13th Five-year Plan and the Belt and Road Initiative to consolidate and enhance its position as a major platform of capital raising and financing for Mainland and overseas enterprises as well as a global hub for offshore RMB business.

The financial services industry also provides a catalyst for the growth of related sectors, such as professional and commercial services. Quality financial services underpin Hong Kong's position as an international business hub, helping local enterprises to seize business opportunities and attracting Mainland and overseas companies to use the city as a platform for raising funds and developing regional business.

Fund-raising Centre

In 2016, the SEHK ranked first worldwide for the second year in a row in terms of the IPO equity funds raised, at $195 billion. It attracted 126 new listings, including six transfers of listing from the Growth Enterprise Market to the Main Board. Apart from Mainland and Hong Kong companies, 11 non-local companies, from Japan, Macau, Malaysia, Singapore and South Korea, also listed on the SEHK. Newly listed companies are attracted by the market's liquidity and access to investors across Asia. The SEHK is working to accept more overseas jurisdictions as places of incorporation.

Asset Management and Private Wealth Management

Fund domiciliation in Hong Kong builds up the city's fund manufacturing capabilities by driving demand for professional services along the whole service chain, including fund management, investment advice, legal and accounting services, and sales and marketing. This allows the city to develop into an all-rounded asset management hub. The combined fund management business was valued at $17,393 billion at the end of 2015. About 69 per cent, excluding REITs, came from non-local investors, indicating that investors outside Hong Kong see the city as a preferred investment platforms. At the end of 2016, there were 2,196 SFC-authorised unit trusts and mutual funds, of which 705 were domiciled in Hong Kong, up 10.8 per cent from a year earlier and 231 per cent more than five years ago.

Open-ended Fund Company Structure

Hong Kong now has in place a legal framework for the introduction of a new open-ended fund company structure as an alternative fund vehicle, after the Legislative Council (LegCo) passed the Securities and Futures (Amendment) Ordinance 2016 in June. This structure allows funds to be set up in an open-ended structure like a company, but with the flexibility, not enjoyed by conventional companies, to create and cancel shares for investors' subscription and redemption in the funds. This additional choice would help attract more funds to use Hong Kong as their base. The SFC and relevant departments are formulating the relevant subsidiary legislation and code to set out the operational and procedural details.

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Figures are quoted from the SFC's annual Fund Management Activities Survey for 2015.

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These include 125 MPF pooled investment funds offered both as retail unit trusts and for MPF purposes.

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