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Financial and Monetary Affairs

independent markets: the Chinese Gold and Silver Exchange Society and the Loco London gold market. 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, the HKEX owns the London Metal Exchange (LME), the world centre for industrial metals trading and price-risk management. The majority of global non-ferrous business is conducted on the LME and its prices are used as global benchmarks. In 2020, 155 million lots were traded at the LME, equating to US$11.6 trillion and 3.5 billion tonnes notional with a market open interest high of 2 million lots.

Bond Market Development

Hong Kong is a major bond market in Asia. Outstanding HKD debt securities, including EFBNs, totalled $2,278 billion at the end of 2020. According to the International Capital Market Association, Hong Kong is the largest centre for arranging bonds issued internationally by Asia- based entities, capturing 34 per cent (or US$196 billion) of the market in 2020. The government pursues bond market development through three strategies:

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⚫ building market infrastructure, such as the CMU and Bond Connect, to ensure a safe and

secure environment for trading and settlement;

⚫ stimulating growth through government issuance of institutional and retail bonds,

including green bonds; and

incentivising market development through subsidy schemes such as the Pilot Bond Grant Scheme, tax incentive schemes such as the Qualifying Debt Instrument Scheme, and other measures.

Asset and Wealth Management

Hong Kong is well placed as Asia's premier asset and wealth management centre, amid rapid wealth creation in Asia and deepening financial market liberalisation in the Mainland. At the end of 2019, Hong Kong's asset and wealth management business was valued at $28,769 billion, of which 64 per cent came from non-Hong Kong investors. At the end of 2020, 1,914 companies were licensed by or registered with the SFC to carry out asset management business locally, up 3.8 per cent from end-2019. There were 2,194 SFC-authorised unit trusts and mutual funds, of which 810 were domiciled in Hong Kong, up 27 per cent from five years

ago.

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The amount excludes SFC-authorised real estate investment trusts and assets held under trusts that were not managed by licensed corporations or registered institutions.

8

Figures are quoted from the Asset and Wealth Management Activities Survey for 2019.

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These included 107 approved pooled investment funds offered both as retail unit trusts and for MPF purposes.

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