Hong Kong Unveils Sweeping Financial Hub Plan in Policy Address

Hong Kong will intensify efforts to reinforce its standing as an international financial centre, Chief Executive John Lee announced in his 2026 policy address on Wednesday, unveiling a broad set of measures spanning offshore yuan business, capital markets, asset and wealth management, and commodities.

Offshore yuan and fixed income

The Hong Kong Monetary Authority is examining ways to enhance its Currency Swap Agreement with the People's Bank of China to improve liquidity in the offshore yuan market. It plans to introduce a tendering mechanism for seven-day offshore yuan liquidity to help banks meet short-term financing needs, and will explore issuing short-term offshore yuan debt instruments.

Hong Kong Exchanges and Clearing Limited will launch the HKEX Offshore RMB Bond Index, intended as a reference for market trends and as an underlying index for exchange-traded funds, while broadening its yuan foreign exchange futures offerings. The HKMA will also study expanding the product scope under Southbound Bond Connect to cover products with Hong Kong dollar and yuan bonds as underlying assets.

Securities market

The Securities and Futures Commission will begin consultation in 2027 on streamlining prospectus disclosure requirements to make it easier for quality overseas enterprises to list in Hong Kong. HKEX will consult in the first half of next year on amendments to specialist technology listing rules, including a review of the market capitalisation threshold. In addition, HKEX is working with the HKMA to introduce a wholesale central bank digital currency for after-hours derivatives trading.

Asset and wealth management

The SFC will simplify procedures to attract quality overseas real estate investment trusts to dual-list in Hong Kong. The government will also promote investment by mainland insurance funds in Hong Kong ETFs through mutual market access and widen the range of eligible ETF products under the scheme.

Commodities and gold

Hong Kong's central clearing and settlement system for gold is scheduled for official launch in the first quarter of 2027. HKEX will announce details this year of new yuan-denominated, physically settled gold futures contracts aimed at strengthening the yuan's global influence in precious metals pricing. The SFC will tighten the regulatory regime for over-the-counter derivatives to support risk and capital management in gold and commodity trading.

The HKMA is considering increasing the Exchange Fund's gold holdings and participating in the city's spot and futures markets, and may gradually move its physical gold to vaults appointed by the Hong Kong Precious Metals Central Clearing Company Limited. A half-rate tax concession for physical commodity trading will be implemented to draw more traders to set up or expand in Hong Kong, alongside a proposal for tax concessions on qualifying activities in the gold and commodity trading ecosystem, which will go to the Legislative Council for consultation next year.