Chief Executive CY Leung: Hong Kong Exchanges & Clearing continues to be a symbol of financial stability and opportunity in Hong Kong. Over the years, the Government has worked with HKEx and other industry players to promote the development of our capital-raising and risk-management platform. We have updated our financial infrastructure, refined our robust regulatory regime and seized market development opportunities. And we are not finished yet, not by a long shot. The launch last year of OTC Clear, our local over-the-counter, OTC, derivative clearing house, highlights the efforts of HKEx in helping Hong Kong keep pace with new global regulatory benchmarks. Mandatory clearing of standardised OTC derivative transactions through central counterparties is a reform initiative of the G20. It will increase transparency and minimise systemic risks of OTC clearing. Earlier this year, we enacted the primary legislation for the reform of the OTC derivative market. The launch of the OTC Clear also represents an important step for HKEx in its long-term strategy to diversify into more asset classes, particularly Renminbi-denominated products, and establish itself as a global vertically integrated multi-asset-class exchange. Paperless securities We continue to upgrade our market infrastructure. Indeed, this week marks an important milestone in the development of a paperless securities market in Hong Kong. My Government will introduce the relevant bill into the Legislative Council on Wednesday. Under the proposed regime, investors can choose to hold and transfer securities without paper documents, and register the securities in their own names. They will have all the benefits of legal ownership, but with lower costs and less red tape. This will help enhance the overall efficiency of our securities market, improve investors' protection and maintain our market competitiveness. I thank HKEx for its support of our plan to introduce a scripless securities market and look forward to a smooth implementation. Stock connect We also look forward to the launch of the Shanghai-Hong Kong Stock Connect pilot programme that was announced by the Premier at the Boao Asia Forum in April. This initiative of the Central Government is a huge vote of confidence in the HKEx and in Hong Kong's role in our country's financial market liberalisation. When it becomes operational later this year, the Shanghai-Hong Kong Stock Connect will provide unprecedented opportunities for investors in both cities. It will also facilitate the flow of Renminbi capital between onshore and offshore markets, adding a new string to Hong Kong's bow as the world's leading centre for offshore Renminbi business. The HKEx's trading and clearing platforms will play an essential role in this new mutual market access link. This programme is a standing testimony to the fact that Hong Kong and Shanghai can work together to grow a bigger market for each other. Between the two cities, it is not a zero-sum game, not even in the financial services sector. High value-added Our financial services industry is characterised by its high value-added: accounting for about 6% of Hong Kong's employment, the industry generates 16% of our GDP. In January last year, we set up the Financial Services Development Council, FSDC, to engage the industry and formulate proposals for further development. The FSDC has so far submitted to the Government nine reports. These reports have also been released to the general public. They include a report published just last week on "Positioning Hong Kong as an International IPO Centre of Choice". We will continue to follow up on the FSDC's recommendations. HKEx and Hong Kong have come a long way since the turn of the 21st century. Together, we have celebrated many financial achievements, and we have experienced a few low points too, not least the recent global financial crisis. The health of our financial markets today speaks volumes for our city's resilience and potential for future development. Chief Executive CY Leung gave this speech at the Hong Kong Exchanges & Clearing 14th anniversary cocktail reception.

• published: 24 Jun 2014
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