Banks unhurt by law, says HKMA

Business | Stella Zhai 24 Jul 2020

The Hong Kong Monetary Authority stressed that the implementation of the national security law will not affect banks' operations.

Eddie Yue Wai-man, the chief executive of the HKMA, wrote in his blog that the security law will not change the HKMA's regulatory policies and guidance, or the regulation pattern of HKMA.

The law will not affect the normal daily activities of financial institutions, Yue said.

This includes activities like the sharing of market intelligence or commercial information collected in Hong Kong with overseas headquarters or overseas operations, as global financial institutions do currently, he said.

Also, the publication of research reports expressing a pessimistic view of Hong Kong's economy or market outlook, trading, hedging or short selling of any financial asset or currency in the spot or derivatives market in accordance with relevant regulatory rules, will not be affected, he wrote.

The city recorded net inflows of HK$14 billion since April despite concerns capital flight and the Hong Kong dollar has maintained a strong position, he said.

Nearly 70 percent of A-shares held by international investors are purchased via Stock Connect, and northbound fund flows reached as high as US$24 billion (HK$187.8 billion) a day in July. More than half of onshore Chinese bond transactions by international investors are via Bond Connect, and transactions rose 190 percent in the first half of the year compared with the same period last year, he mentioned.

Yue also forecast the wave of overseas-listed mainland companies coming to Hong Kong for listing and the launch of new initiatives like the Wealth Management Connect, would bring growth room for the city.

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