Response Statement of the Hong Kong Securities & Futures Professionals Association on the Budget
Release Date: 2026-02-25
Response Statement of the Hong Kong Securities & Futures Professionals Association on the Budget
The Hong Kong Securities & Futures Professionals Association (hereinafter referred to as "the Association") welcomes the Budget announced today (February 25, 2026) by the Financial Secretary, Mr. Paul Chan Mo-po. The Association believes that this Budget meets expectations and actively responds to the industry's recommendations in several key areas, demonstrating the Government's determination to vigorously reform, consolidate, and enhance Hong Kong's status as an international financial centre. The Association's specific responses to the various measures in the Budget are as follows:
I. Aligning with the National "15th Five-Year Plan"
The Association warmly welcomes the Financial Secretary's clear statement in his speech that Hong Kong will proactively align with the national "15th Five-Year Plan" and formulate its own five-year plan for the first time.
1. "Finance+" and Industry Synergy: The Budget proposes advancing "Finance+" to better utilise finance in serving the real economy and accelerating the mutual empowerment of finance and innovation and technology. This responds to the Association's advocacy for developing digital finance, green finance, and fintech innovation, providing policy support for the industry to explore applications of artificial intelligence and blockchain in areas such as compliance and risk management.
2. Super-Value Adder Role: The Budget emphasises that Hong Kong should act as a "super-connector" and "super-value adder" for enterprises "bringing in" and "going global". This aligns with the Association's advocacy for "enhancing the depth of professional services", requiring the industry to not only act as an intermediary but also provide high value-added services in risk management, product design, and compliance advisory.
3. Alignment Mechanism and Talent Pooling: The establishment of a cross-bureau and cross-departmental dedicated task force led by the Chief Executive to align with the "15th Five-Year Plan" and the building of a hub for high-end international talent provide both institutional and talent support for the Association's recommendations on "strengthening talent cultivation and professional service capabilities".
The Association looks forward to close communication with the Government's task force in the future, particularly in specific areas such as expanding the RMB product suite, aligning green finance standards, piloting cross-border regulatory sandboxes, and refining the derivative risk control framework, to jointly translate the planning blueprint into implementable policies and measures.
II. Promoting RMB Internationalisation
The Association warmly welcomes the detailed measures outlined in the Budget to promote RMB internationalisation.
1. Expanding the RMB Business Funding Arrangement: Doubling the total headroom of the RMB Business Funding Arrangement to RMB 200 billion responds to the Association's advocacy for "seizing the opportunities arising from RMB capital account convertibility facilitation". This will help encourage financial institutions to use RMB more extensively in trade and cross-border businesses.
2. Enriching the Offshore RMB Product Suite: Measures such as regularly issuing RMB bonds of different maturities, extending the offshore RMB interest rate curve, and attracting high-quality issuers to issue bonds in Hong Kong fully align with the Association's advocacy for "accelerating the launch of more RMB bonds, wealth management products, and cross-border asset allocation products". These measures will help perfect the offshore RMB yield curve and enhance market liquidity and pricing functions.
3. Deepening Mutual Access Schemes: Accelerating the implementation of treasury bond futures, including Real Estate Investment Trusts (REITs) and RMB trading counters in mutual access schemes, and continuously optimising Bond Connect are consistent with the Association's recommendations on "strengthening cross-border IPO underwriting capabilities" and "promoting more RMB-denominated futures and derivatives". This further consolidates Hong Kong's pivotal role connecting Mainland Chinese and international capital markets.
The Association is pleased to see the Government actively adopting industry suggestions and will continue to communicate with regulatory bodies and Government task forces to jointly promote the expansion of RMB product lines and the facilitation of cross-border settlement.
III. Developing "AI+"
The Association welcomes the Government's strategy to promote "AI+" development and believes that driving the industrialisation of AI, enhancing computing power infrastructure, and providing universal AI training will inject new impetus into Hong Kong's fintech development. The Association particularly supports the HKMA and Cyberport's launch of the second phase of the sandbox to explore "using AI to fight AI". This will provide an important reference for the securities and futures industry in applying AI to risk management and cybersecurity. The Association looks forward to cooperating with the Government and relevant institutions to help practitioners acquire AI skills and seize fintech opportunities.
IV. Reforming the Securities Market
Since the implementation of the "Severe Weather Trading" arrangement in September 2024, the Government has stated it has made a significant contribution to fiscal revenue. The Association hopes the Government will promote tax reform in the long run to diversify revenue sources and enhance overall fiscal robustness. Regarding the specific reform measures in the Budget, the Association responds as follows:
1. Response to Core Aspirations:
- Reform of Board Lot Sizes Realised: The Budget clearly proposes "reforming the board lot size for the securities market", directly responding to the Association's core aspiration regarding "reform of board lot sizes for Hong Kong stocks". This move will help simplify the system, lower the entry barrier for retail investors, and enhance market liquidity.
- Promoting Dematerialisation and Regulatory Collaboration: The Budget mentions launching a paperless securities market system in conjunction with the SFC and the industry, responding to the Association's concerns about "enhancing regulatory efficiency" and "reducing operational costs", aligning with international trends. It is hoped that following the promotion of dematerialisation, the relevant authorities can reduce costs across the board for the industry.
2. Affirmation of the Overall Direction: The various securities market reform measures proposed in the Budget cover major areas such as the cash market, the IPO market, and infrastructure optimisation, demonstrating the Government's determination to drive Hong Kong's capital market forward with the times.
3. Ongoing Monitoring and Collaboration: The Association will continue to monitor subsequent developments in areas such as stamp duty adjustments, the commercialisation of virtual assets, and investor protection mechanisms. It looks forward to maintaining communication with the Government and regulatory bodies to ensure that the benefits of the reforms reach the market. With the deficit narrowing this year and the Financial Secretary projecting a surplus next year, the securities industry and stock stamp duty have made significant contributions. We hope the Government will pay more attention to the securities industry in the future. We hope for tax base reform to spread the problem of a narrow income stream and also to balance the focus of revenue. For example, reducing salaries tax, which is mainly paid by the middle class, and stamp duty, which mostly comes from stock trading.
4. Facilitating Secondary Listings for Overseas Issuers: Regarding facilitating secondary listings for overseas issuers: If HKEX further streamlines the secondary listing process, unifies and lowers thresholds (e.g., optimising requirements regarding qualifying exchanges, compliance record periods, and market capitalisation requirements), it could bring mature, large-cap targets to Hong Kong stocks, improving index quality and the willingness of international funds to allocate. Against the backdrop of heightened geopolitical tensions and regulatory divergence, providing a clearer and more operable secondary listing pathway helps Chinese or international enterprises already listed in the US or Europe diversify risks, while simultaneously consolidating Hong Kong's role as a "dual-primary/secondary listing hub".
V. Developing the Bond Market
The Association welcomes and supports the content of the Budget concerning bond market development. Implementing the "Roadmap for the Development of the Fixed Income and Currency Markets" and launching an electronic bond trading platform will help enhance market efficiency and transparency, attracting greater participation from international investors. Furthermore, the Government's third issuance of tokenised bonds, including the option for tokenised central bank money settlement, showcases Hong Kong's leading advantages in fintech innovation. The Association supports the continued regular issuance of tokenised bonds and promoting the digital transformation of the bond market through the "Digital Bond Grant Scheme".
VI. Building an Asset and Wealth Management Hub
The multiple measures in the Budget concerning the development of the asset and wealth management hub closely align with the Association's recommendations. The Association welcomes and firmly supports these measures.
1. Tax Optimisation Responds to Aspirations: Broadening the definition of "fund" and including digital assets, precious metals, etc., as eligible investments for tax concessions directly responds to the Association's advocacy for "tax reform" and "precious metals market development", helping to consolidate Hong Kong's position as an asset management hub.
2. REIT Market Development: Promoting the inclusion of REITs in mutual access schemes, facilitating restructuring, and exempting stamp duty align with the Association's advocacy for "enhancing market liquidity" and "deepening mutual access", helping to enrich product choices.
3. Fintech Application: Extending the functions of HKEX's Integrated Fund Platform to cover payment and settlement responds to the Association's advocacy for "promoting technological innovation" and "reducing transaction costs", helping to enhance market efficiency.
4. Continuing to Promote Family Office Development: The Budget's further attraction of family offices through tax optimisation shows the Government is addressing the industry's concerns about tax competitiveness, strengthening Hong Kong's appeal as a family office hub.
VII. Other Key Areas
- Measures to Enhance Competitiveness: The Association supports optimising the tax arrangements for corporate treasury centres and relaxing stamp duty on intra-group asset transfers. These initiatives will significantly enhance Hong Kong's attractiveness as a treasury centre for multinational corporations.
- Digital Asset Development: The Association endorses the Government establishing a licensing regime for digital asset trading and custody service providers and promoting the compliant application of fiat-referenced stablecoins. These measures can protect investors while opening up new growth areas for the industry.
- Crypto-Asset Reporting Framework (CARF): The Association understands the necessity of implementing CARF to enhance tax transparency but is also concerned about the potential compliance costs, data privacy issues, and technical challenges. We hope the Government will clarify the specific scope of "crypto-assets" and transitional arrangements before legislation, and consider Hong Kong's competitiveness to avoid overly complex implementation deterring investors from conducting compliant transactions in Hong Kong.
- Project Ensemble: The Association warmly welcomes the project entering the pilot phase. This directly responds to the Association's core aspirations regarding "deepening the commercialisation of Project Ensemble" and "stimulating liquidity". Promoting real transactions using tokenised deposits and digital assets, supporting round-the-clock settlement, and enhancing international interoperability are crucial steps in moving tokenisation technology from proof-of-concept to practical application, helping integrate virtual assets into the real economy.
- Establishing an International Gold Trading Market: The Association fully supports the three major directions proposed in the Budget: providing tax concessions for eligible institutions, establishing an industry association, and emphasising talent training. These measures will help attract international participants, build an industry network, and lay the foundation for the sustainable development of the market.
- Helping Mainland Enterprises Go Global: The Association fully supports the establishment of a dedicated task force and a cross-sectoral professional services platform to assist Mainland enterprises in using Hong Kong as a base to expand into overseas markets. The securities and futures industry is willing to collaborate with other professional sectors to provide comprehensive capital market services for enterprises going global.
- Cultivating Talent: The Association supports the multiple measures in the Budget for cultivating financial talent and affirms the effectiveness of the "Financial Leaders Programme" and the "GBA University Students Fintech Internship Programme". Such programmes help enhance the industry's competitiveness and build a talent pool of young people familiar with cutting-edge skills for the sector.
Conclusion
In summary, this Budget actively responds to the industry's voice at multiple levels, introducing a series of forward-looking and targeted measures. The Hong Kong Securities and Futures Professionals Association will, as always, support policies beneficial to the development of the industry and the nation. It looks forward to maintaining close communication with the Government and regulatory bodies, providing professional advice on the specific implementation of various measures, jointly seizing the opportunities of the "15th Five-Year Plan", and working together to consolidate and enhance Hong Kong's status as an international financial centre.
Mofiz Chan
Chairman
Hong Kong Securities & Futures Professionals Association