HK set to lift wealth hub crown from Switzerland

Hong Kong is expected to overtake Switzerland next year to become the world's largest cross-border wealth management center by assets under management, says an advisory body set up by the government.

To capture future opportunities, the Financial Services Development Council has proposed enhancements to existing regimes in the latest report, says its chairman, Laurence Li Lu-jen.

The report mainly focuses on five areas: know-your-customer practices, professional investor regime, suitability framework, tax treatments, and education and talent development.

The recommendations include aligning the KYC regimes with other regimes, including anti-money laundering across the financial services industry.

It also suggests introducing a sophisticated professional investor classification and a higher asset-based professional investor test in which suitability obligations could be exempted.

Introducing tax treatments favorable to the private wealth management industry can also be considered, the FSDC report states.

This came as a total of 8,600 claims to withdraw from the Mandatory Provident Fund were made in the second quarter due to permanent departures from the city, up by 14.7 percent from the previous quarter, government data showed yesterday.

Residents leaving Hong Kong for good withdrew a total of HK$2.114 billion from their pension accounts in the April-June period, up 5 percent quarter on quarter.

Curbs to control the spread of Covid are partly blamed for a net outflow of 113,200 people from Hong Kong between mid-2021 and mid-2022, government estimates say.

The Mandatory Provident Fund Scheme Authority said multiple claims are sometimes made by a single person as a scheme member may have more than one account under the MPF System.

In other news, Hong Kong's foreign currency reserve assets amounted to US$431.8 billion (HK$3.37 trillion) at the end of last month, down US$10 billion from July, says data from the city's de facto central bank.

Separately, Financial Secretary Paul Chan Mo-po said yesterday that Hong Kong will be better integrated into the overall development of the country through the development of the Greater Bay Area.

The economic integration can be facilitated as the cross-border infrastructure between Hong Kong and other Greater Bay Area cities have been completed in recent years, he added.