Hong Kong unveiled a blueprint on Thursday for its fixed income and currency markets, including measures to expand offshore yuan products and liquidity to consolidate its role as an international financial hub.
The Roadmap for the Development of Fixed Income and Currency (FIC) Markets, jointly unveiled by the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA), sets out plans to broaden offshore yuan usage and expand cross-border Connect schemes to enhance offshore liquidity and yuan-linked product offerings.
It also proposes widening the investor base for fixed income products to include family offices, investment funds and corporate treasury centres.
“To position Hong Kong as a global FIC hub and further cement our position as the premier offshore RMB business centre, the HKMA will capitalise on emerging trends, including RMB internationalisation and the digitalisation of the FIC market,” HKMA chief executive Eddie Yuen Wai-man said.
SFC CEO Julia Leung Fung-yee added: “We will continue to enhance the liquidity of the secondary market for offshore renminbi fixed-income products, and improve risk management mechanisms.”
Under the road map, Hong Kong financial regulators are expected to support rehypothecation of Northbound Bond Connect bonds obtained in repo transactions, and launch the cross-border repo business and offshore China Government Bond futures in Hong Kong to expand offshore yuan businesses. Hong Kong’s financial regulators would also continue to facilitate the issuance of Chinese government bonds.
