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Following is the speech by the Chief Executive, Mr C Y Leung, at the 14th anniversary cocktail reception of Hong Kong Exchanges and Clearing Limited (HKEx) this evening (June 23):
Chung-kong (HKEx Chairman, Mr Chow Chung-kong), Charles (HKEx Chief Executive, Mr Charles Li), distinguished guests, ladies and gentlemen,
Good evening.
It is my great pleasure to join you all in celebrating the 14th anniversary of the Hong Kong Exchanges and Clearing Limited, HKEx. This is undoubtedly one of the biggest and best parties in town for our financial services industry. Thank you for inviting me back this year.
First and foremost, I congratulate Chung-kong and his dedicated team on the achievements of HKEx since its inception and subsequent public listing in the year 2000. HKEx continues to be a symbol of financial stability and opportunity in Hong Kong. Over the years, the Government has worked with HKEx and other industry players to promote the development of our capital-raising and risk-management platform. We have updated our financial infrastructure, refined our robust regulatory regime and seized market development opportunities. And we are not finished yet, not by a long shot.
The launch last year of OTC Clear, our local over-the-counter, OTC, derivative clearing house, highlights the efforts of HKEx in helping Hong Kong keep pace with new global regulatory benchmarks.
Mandatory clearing of standardised OTC derivative transactions through central counterparties is a reform initiative of the G20. It will increase transparency and minimise systemic risks of OTC clearing. Earlier this year, we enacted the primary legislation for the reform of the OTC derivative market.
The launch of the OTC Clear also represents an important step for HKEx in its long-term strategy to diversify into more asset classes, particularly Renminbi-denominated products, and establish itself as a global vertically integrated multi-asset-class exchange.
We continue to upgrade our market infrastructure. Indeed, this week marks an important milestone in the development of a paperless securities market in Hong Kong. My Government will introduce the relevant bill into the Legislative Council on Wednesday. Under the proposed regime, investors can choose to hold and transfer securities without paper documents, and register the securities in their own names. They will have all the benefits of legal ownership, but with lower costs and less red tape. This will help enhance the overall efficiency of our securities market, improve investors' protection and maintain our market competitiveness.
I thank the HKEx for its support of our plan to introduce a scripless securities market and look forward to a smooth implementation.
We also look forward to the launch of the Shanghai-Hong Kong Stock Connect pilot programme that was announced by the Premier at the Boao Asia Forum in April. I can still remember the excitement in Boao and in Hong Kong when the launch was finally announced. I had with me on that morning none other than the Secretary for Financial Services and the Treasury, Professor K C Chan, and the Chief Executive of HKEx, Charles Li. I rang Chung-kong, the Chairman of HKEx, and I also traded phone calls with the Honourable Cheung (Christopher Cheung), representing the industry on the Legislative Council, and I heard, and I can still recall, many happy and excited voices in Hong Kong. This initiative of the Central Government is a huge vote of confidence in the HKEx and in Hong Kong's role in our country's financial market liberalisation. When it becomes operational later this year, the Shanghai-Hong Kong Stock Connect will provide unprecedented opportunities for investors in both cities. It will also facilitate the flow of Renminbi capital between onshore and offshore markets, adding a new string to Hong Kong's bow as the world's leading centre for offshore Renminbi business. The HKEx's trading and clearing platforms will play an essential role in this new mutual market access link.
This programme is a standing testimony to the fact that Hong Kong and Shanghai can work together to grow a bigger market for each other. Between the two cities, it is not a zero-sum game, not even in the financial services sector.
Our financial services industry is characterised by its high value-added: accounting for about 6 per cent of Hong Kong's employment, the industry generates 16 per cent of our GDP. In January last year, we set up the Financial Services Development Council, FSDC, to engage the industry and formulate proposals for further development. The FSDC has so far submitted to the Government nine reports. These reports have also been released to the general public. They include a report published just last week on "Positioning Hong Kong as an International IPO Centre of Choice". We will continue to follow up on the FSDC's recommendations.
Ladies and gentlemen, the HKEx and Hong Kong have come a long way since the turn of the 21st century. Together, we have celebrated many financial achievements, and we have experienced a few low points too, not least the recent global financial crisis.
The health of our financial markets today speaks volumes for our city's resilience and potential for future development.
I congratulate the HKEx on its 14th anniversary, I thank all directors and staff of the HKEx for their hard work and I wish you all a very enjoyable party and evening.
Thank you very much.
Ends/Monday, June 23, 2014
Issued at HKT 21:10
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