Briefing on the work of the Hong Kong Monetary Authority
Development of the financial services sector
Referring to the Central Government’s promulgation of the Outline Development Plan in February 2019, Mr CHAN Chun-ying enquired whether HKMA would consider organizing visits for the local banking sector to the Bay Area to facilitate the latter’s exchange and discussion with its Mainland counterparts and relevant Mainland regulatory authorities on the implementation of various initiatives set out in the Outline Development Plan.
CE/HKMA said that the Outline Development Plan covered a lot of areas, including the financial services sector. HKMA had been working on a number of financial facilitation measures, including the pilot use of Hong Kong e-wallets in the Mainland, simplifying Mainland bank account opening process by Hong Kong residents, and mutual access of wealth management products. As the measures involved cross-border capital flow management, HKMA would need to liaise with the relevant central authorities in the Mainland, including the People’s Bank of China. HKMA would also consult the banking industry as appropriate in implementing the relevant measures.
Investment performance of the Exchange Fund
Mr CHAN Chun-ying expressed concern about the relatively low real investment returns of EF in the past five years, and enquired whether HKMA would review EF’s investment strategy. Pointing out that around 70% of EF’s assets were in bonds, he enquired about measures HKMA would take to prepare for a possible correction in the global bond market given that the yield curves of a number of economies might flatten in the future
Mr CHAN Chun-ying welcomed the scheme introduced by the Hong Kong Association of Banks in 2018 for the elderly to withdraw cash at convenience stores and post offices without the need to make purchases (“the Scheme”). He enquired whether HKMA had collected data and feedback on the Scheme to consider further improvement for the Scheme.
DCE(B)/HKMA said that since the launch of the Scheme in 2018, the service had been expanded to over 300 convenience stores. The total withdrawal amount had recorded over HK$630,000, which was a satisfactory level, noting that there was a prescribed limit for each cash withdrawal (i.e. HK$500). The Scheme had also been extended to seven post offices mainly on outlying islands and in the New Territories. HKMA would liaise with the relevant parties, including the Hongkong Post, to examine how to further enhance the Scheme.
Budget of the Securities and Futures Commission for the financial year of 2019-2020
Investment strategies of reserves
Given the good investment performance of EF, Mr CHAN Chun-ying enquired whether SFC would consider adopting EF’s investment strategies in managing its reserves so as to achieve higher investment returns.
C/SFC advised that SFC’s reserves were not as sizeable as EF, and SFC had the statutory obligation to adopt conservative and cautious strategies in investing its reserves, including capping investment in equity funds at 15% of the overall investment portfolio and putting the remaining 85% on fixed-income investments (e.g. bonds). SFC considered that it would be appropriate to task its own Investment Committee with the duties of managing SFC’s reserves. The Committee had appointed four fund managers to handle the investment of SFC’s reserves and would explore measures to improve the investment returns from time to time.