ENG-2016 — Page 98

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Financial and Monetary Affairs

Fund Authorisation

After a six-month pilot period, the SFC formally adopted the revamped fund authorisation process and the six-month application lapse policy for new MPF and pooled retirement fund products with effect from 9 May. These initiatives aim to make the authorisation process more streamlined, efficient and focused on key risks without compromising investor protection.

Mutual Recognition of Funds

In December, the SFC and the Swiss Financial Market Supervisory Authority signed a Mutual Recognition of Funds (MRF) agreement which allows eligible public funds to be distributed in each other's market through a streamlined vetting process. This creates more opportunities for the local asset management industry and provides investors in both markets with a broader selection of fund products. The Mainland-Hong Kong MRF arrangement, launched in 2015, continued to operate smoothly during the year. As at end-2016, the regulators of the two places had authorised 54 funds, with aggregate net sales of about RMB8 billion.

Corporate Treasury Centres

Hong Kong is Asia's premier location for multinational corporations to manage their global or regional treasury functions. Its favourable tax and regulatory environment helps attract Mainland and overseas companies to establish Corporate Treasury Centres (CTCs) in the city. The Inland Revenue (Amendment) (No. 2) Ordinance 2016 was enacted in June, allowing interest deduction in calculating profits tax for the intra-group financing business of corporations operating in Hong Kong under specified conditions, and profits tax reduction by 50 per cent for qualifying CTCs.

Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AlIB) is a multilateral development bank which plays. an important role in supporting infrastructure development in Asia and promoting regional connectivity. Hong Kong's capital markets and asset management professionals and various financial products can support the bank's operations in areas such as project financing, bond issuance, investment, financial management and forex management.

Infrastructure Financing Facilitation Office

Hong Kong's unique position as an international financial centre and the most important springboard for Mainland corporates to expand overseas facilitates infrastructural investments and their financing. To this end, the HKMA established the Infrastructure Financing Facilitation. Office on 4 July, followed by an inaugural conference co-organised with the Boao Forum for Asia the next day. The office's mission is to facilitate infrastructural investments and their financing by working with a cluster of key stakeholders. By end-2016, it had welcomed 54 organisations from Hong Kong, the Mainland and overseas as partners.

The office also signed Memorandums of Understanding to enhance cooperation with the IFC, Global Infrastructure Hub, China Development Bank and Export-Import Bank of China.

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