ENG-2017 — Page 110

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Financial and Monetary Affairs

Corporate Insolvency Law

The Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 aims to improve and modernise Hong Kong's corporate winding-up regime to increase creditor protection, streamline the winding-up process and enhance its integrity. It came into operation in February 2017.

Hong Kong as China's Global Financial Centre

Capital Formation Centre and Global Investment Platform for Mainland

Hong Kong is the ideal centre for Mainland enterprises to raise capital. The growing presence of Mainland companies listed on the SEHK has in turn increased the breadth and depth of Hong Kong's securities and futures markets through a greater diversity of products and of constituent stocks in the equity market. Mainland enterprises also raise capital in Hong Kong through the issuance of bonds, project financing and loan syndication. Moreover, they can leverage Hong Kong's position as an international business centre and its world-class investment banking services to invest in international markets via mergers and acquisitions.

Offshore RMB Business

Hong Kong remained the leading and most important offshore RMB hub in 2017. As at the year end, the offshore RMB deposit pool in Hong Kong, including customer deposits and outstanding certificates of deposit, amounted to RMB618.4 billion, while RMB bank lending and outstanding RMB bonds stood at RMB144.5 billion and RMB212.4 billion respectively. RMB trade settlement handled by banks in Hong Kong totalled RMB3.9 trillion in 2017.

Qualified institutions show interest in developing funds which invest in Mainland onshore markets via the Renminbi Qualified Foreign Institutional Investor (RQFII), Stock Connect, Bond Connect and China Interbank Bond Market (CIBM)6. At the end of 2017, there were 41 fund management companies managing 59 SFC-authorised unlisted funds investing onshore via these channels with an aggregate NAV of RMB6.8 billion, and 29 SFC-authorised exchange- traded funds (ETFs) investing onshore via these channels with an aggregate NAV of RMB34.1 billion.

In July, the RQFII quota for Hong Kong was raised from RMB270 billion to RMB500 billion, once again the highest in the world. The increase enhances the cross-border use and circulation of RMB funds between Hong Kong and the Mainland, deepens the connectivity between the two markets and reinforces Hong Kong's status as the global offshore RMB business hub.

Stock Connect

The Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect have continued to enhance cross-border market accessibility since they were launched in 2014 and 2016 respectively.

6 The unlisted funds and ETFs that invest in the Mainland onshore markets via the RQFII, Stock Connect, Bond Connect and CIBM are RMB-denominated funds which primarily invest in Mainland securities markets through the RQFII quota, Stock Connect, Bond Connect and CIBM.

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