HKMA chief: Rectification campaign consolidates Hong Kong's financial hub status

The mainland's latest campaign against illegal cross-border securities activities is expected to help strengthen rather than weaken Hong Kong's position as an international financial center, according to Eddie Yue, chief executive of the Hong Kong Monetary Authority.

"For Hong Kong as an international financial center, I think this is actually more conducive and further strengthens its position, because no international financial center would allow or tolerate illegal activities taking place within its jurisdiction," Yue told China Daily on Monday.

On May 22, eight mainland government departments — led by the China Securities Regulatory Commission — issued an implementation plan to eradicate illegal cross-border securities, futures, and fund business activities within two years.

Yue said Hong Kong regulators had maintained close communication with mainland authorities on the implementation of the rectification measures. On the day the plan was announced, both the Hong Kong Securities and Futures Commission and the HKMA issued circulars requiring securities firms and banks to strengthen account opening procedures and compliance requirements.

According to Yue, Hong Kong-based banks have been highly supportive of the changes and have completed the necessary system upgrades. Banks have introduced additional declarations requiring clients to confirm that funds transferred to Hong Kong originate from lawful sources, while account opening services have continued in a smooth manner.

"The most important thing" in cross-border investment activities "is still legality and compliance", Yue said stressing the principle that while illegal activities should be eliminated, lawful and compliant account opening and investment activities should continue as normal.

He added that he does not expect the measures to have any significant impact on Hong Kong's future development as an international financial center and wealth management hub.