Response to the 2024 Policy Address on Financial Measures
Date: 16 October 2024
Response to the 2024 Policy Address on Financial Measures
The Hong Kong Securities and Futures Professionals Association (the "Association") welcomes and supports the various financial measures proposed by Chief Executive John Lee in the Policy Address on October 16, 2024. These measures demonstrate the government's determination and strategy to promote Hong Kong's continued development as an international financial center. However, the Association is disappointed that the Policy Address did not mention a reduction in the stock stamp duty, considering it an important issue to further strengthen Hong Kong's financial competitiveness.
Stock Stamp Duty Issue: The Association reiterates that timely reduction of the stock stamp duty is crucial for enhancing the attractiveness of Hong Kong's financial market amid global economic uncertainties and increasing financial market competition. The current stamp duty level suppresses market liquidity to some extent, increases transaction costs for investors, and weakens Hong Kong's competitiveness compared to other international financial centers. The Association suggests that the government carefully consider formulating a medium- to long-term strategy to gradually reduce and eventually abolish the stock stamp duty. This move would help increase market trading volumes, attract more companies to list in Hong Kong, promote financial innovation, create more job opportunities, and drive economic growth.
Furthermore, the Association hopes the government will maintain close communication with the industry when further adjusting financial market policies, coordinating schemes that promote healthy market development, especially in enhancing market transparency and strengthening investor protection, to ensure the long-term sustainability of the Hong Kong market.
Other Financial Measures: Nevertheless, the Association welcomes and supports other financial-related policies in the Policy Address. These measures cover areas such as financial technology, commodity trading, and tax relief, demonstrating Hong Kong's efforts and direction in building a diverse and forward-looking financial ecosystem.
Building a Commodity Trading Ecosystem: The Association fully supports the government's strategy to establish a commodity trading ecosystem. Attracting shipowners and commodity traders to operate in Hong Kong will promote the development of maritime services and futures hedging, helping solidify Hong Kong's position as an international shipping center. As maritime services improve and commodity trading scales up, Hong Kong can further strengthen its influence in the global trade system. Specifically, the Association hopes the government can expedite the implementation of tax incentives and other supporting measures for commodity enterprises to attract more mainland and international companies to conduct related business in Hong Kong.
Expanding Tax Relief Scope: The Association highly supports the government's plan to expand the scope of tax relief, especially covering transactions by funds and single family offices. This measure will further enhance Hong Kong's status as an international asset management and wealth management center, attract more capital inflows into Hong Kong, and drive further development of the capital market. The Association looks forward to in-depth exchanges with the government to discuss specific tax relief measures and provide professional opinions during the policy-making process.
Building a Financial Technology Innovation Ecosystem: The Association fully supports the government's policy initiatives in the field of financial technology, particularly its exploration of central bank digital currencies (CBDC), virtual asset trading, and digital asset tokenization. These innovative initiatives will greatly promote the digital transformation of Hong Kong's financial market, allowing Hong Kong to maintain a leading position in global financial technology competition. The Association believes that promoting the "Ensemble" financial market infrastructure project and the tokenization of virtual assets will create new market opportunities for Hong Kong, attracting more high-tech enterprises and investors. The Association also looks forward to the government strengthening regulation of the virtual asset market while promoting these policies, ensuring market stability and sustainable development.
Overall, the Association supports the financial measures in the Policy Address, as they will lay a solid foundation for the long-term development of Hong Kong's financial industry. However, the issue of the stock stamp duty remains a pressing issue that needs to be addressed. We urge the government to seriously consider the feasibility of reducing the stamp duty and to work closely with the industry to develop a practical long-term development strategy. The Association will continue to support the government's efforts to optimize various initiatives in the financial market and looks forward to working hand in hand with the government and industry stakeholders to jointly promote the continued development of Hong Kong as an international financial center.
Mofiz Chan
Chairman
Hong Kong Securities and Futures Professionals Association