Speech at Panel on Financial Affairs

Briefing on the work of Hong Kong Monetary Authority

Macroeconomic environment and financial and monetary stability of Hong Kong

Mr CHAN Chun-ying stressed the importance for HKMA to dispel vicious rumours about the monetary and financial stability of Hong Kong, and enquired about details of the mechanism HKMA had established to facilitate its work in this regard. Mr CHAN Kin-por echoed the views, and enquired whether HKMA had collected the contact information of the mass media and relevant stakeholders to facilitate the dissemination of its information.

CE/HKMA said that HKMA had been on high alert for rumours on social media platforms and strived to respond swiftly to false rumours through the use of traditional and social media platforms in order to reassure the public in a timely manner. To maximize the reach of its messages, HKMA had set up a network of key contacts such that important statements or clarifications could be sent to relevant stakeholders in a more systematic and effective manner. Based on its experience in the past few months, HKMA’s quick and clear rebuttals to rumours proved useful in quelling false rumours from spreading further.

The SME Financing Guarantee Scheme and financing difficulties of small and medium-sized enterprises

Mr CHAN Chun-ying enquired whether enterprises having obtained loans under the existing plans of SFGS could apply for the 100% LG which offered lower interest rates.

CE/HKMA noted that many SMEs, especially those in the retail sector, were facing a difficult operating environment currently. It was envisaged that the number of approved applications for the 90% GP would gradually increase with the rising number of participating banks in the scheme. As regards the 100% LG, HKMC would strive to roll out the scheme within one month after FC had approved the funding, in order to ease corporates’ cash flow pressures as quickly as possible. HKMC would announce the list of participating banks once confirmed, and would also discuss with the banking industry on the scope of further streamlining the application and vetting procedures under SFGS. CE/HKMA pointed out that enterprises with loans under the existing SFGS plans could also apply for the 100% LG as long as they met the relevant criteria.

The property market

Mr CHAN Chun-ying noted that the interest rates of the proposed Fixed-rate Mortgage Pilot Scheme (“FMPS”) to be launched by HKMC were on the high side, and enquired whether HKMC would review the interest rates of FMPS if the scheme was not well-received.

CE/HKMA explained that FMPS eliminated interest rate risks and provided an additional mortgage payment option for property buyers, although under the current low interest rate environment, the interest rates of FMPS might be higher than those of mortgages with floating rates. HKMC would regularly review the interest rates of FMPS having regard to market developments.


Strategic development of Hong Kong as a premier listing platform and the development of the Hong Kong Exchanges and Clearing Limited

Improving the quality of the Hong Kong stock market

Mr CHAN Chun-ying noted that HKEX had heightened the review on listing applications that could marginally meet the eligibility requirements under the Listing Rules, and as a result, the number of listing applications rejected had increased in recent years. Given that SFC had powers to object to the listing of any securities, Mr CHAN enquired whether SFC had reviewed the listing applications of the rejected cases. Noting that “Technology Empowered” was among the major themes underlying HKEX’s Strategic Plan 2019-2021, Mr CHAN enquired how HKEX would apply new technologies to strengthen its front-line regulatory role.

H/HKEX responded that HKEX had adopted a multi-pronged approach to improve the market quality in addition to heightening the review on listing applications. She said that the Listing Rules had been amended in August 2018 to delist, in a timely manner, companies that no longer meet the continuing listing criteria. The number of delisted companies increased from five and four in 2017 and 2018 respectively to 19 in 2019. Moreover, the Listing Rules and practices relating to backdoor listings had also been tightened. As regards the use of technologies, CE/HKEX said that HKEX would focus on applying new technologies, including artificial intelligence, blockchain, cloud infrastructure, etc., in an agile manner to optimize process in order to enable greater efficiency in operations and deliver new services to the market.