Hong Kong Securities and Futures Commission (SFC) Chairman Martin Wheatley said on Wednesday that Hong Kong has great potential to expand its asset management business on the back of its proximity to the Chinese mainland and some other favorable conditions.
Delivering a speech at the opening ceremony of the 31st Annual Conference of International Organization of Securities Commission (IOSCO), he said that the other favorable conditions also include Asia's high domestic savings, promising regional economic outlook, vast pension scheme assets held by banks and fund managers and insurance companies in the region.
He said the Chinese mainland's policy direction towards relaxing and expanding outward investment is also in favor of Hong Kong's expansion of asset management business.
Wheatley said the securities market of Hong Kong had come a long way since the establishment of the SFC in 1989, noting the encouraging growth in the number and market capitalization of Chinese mainland companies, the variety of derivative products and the sizable growth of the fund sector.
He said the Chinese mainland companies started listing in Hong Kong as H-shares and Red Caps in 1993, and so far there are 217 Chinese mainland listings in Hong Kong, accounting for 40 percent of the market.
He said Hong Kong is one of the very first jurisdictions in the world to allow the sale of hedge funds to the retail public since May 2002. There are 13 retail funds authorized by the SFC with a total net asset size of 1.15 billion U.S. dollars.
He said the net asset size as in March 2006 was more than six times largest than that at 2002-end, the year when the hedge funds guidelines were first issued.
He said Hong Kong also witnessed thriving growth of hedge funds over the past few years and the SFC would continue its efforts to foster the healthy growth of the Hong Kong market and maintain its status as an international financial center.