2026 Policy Address: Key Highlights for Hong Kong’s Financial Services Industry
The Hong Kong Chief Executive’s 2026 Policy Address (Policy Address) sets out a comprehensive blueprint that reaffirms and enhances Hong Kong’s status as the world’s leading international financial centre. Building on the city’s established strengths, the Policy Address introduces a series of key initiatives that present significant opportunities for the financial services sector and reshape the regulatory landscape including the following:
1. Bolstering the Global Offshore Renminbi (RMB) Hub:
- Liquidity Enhancement: The Hong Kong Monetary Authority (HKMA) will introduce a seven-day offshore RMB liquidity tendering mechanism, explore enhancements of the Currency Swap Agreement and consider the issuance of offshore RMB short-term debt instruments.
- Dim Sum Bond: Expansion of the dim sum bond market and launch by The Hong Kong Exchanges and Clearing Limited (HKEX) of the HKEX Offshore RMB Bond Index as a reference for market trends and the underlying index for exchange-traded funds (ETFs).
- RMB Counters: The Securities and Futures Commission (SFC) is preparing for the inclusion of RMB counters under Stock Connect’s Southbound Trading, while the HKEX will encourage listed companies to set up RMB counters.
- Product Diversification: The HKMA will consider the expansion of product scope under the Southbound Bond Connect to include products with Hong Kong dollar bonds and RMB bonds as underlying assets.
- Collateral Enhancement: Expansion of the scope of acceptance of Northbound Bond Connect bonds as collateral and development of bond repurchase business using Southbound Bond Connect bonds as collateral.
2. Advancing Fixed Income Markets:
- Global Regulatory Standards: Enhancement of regulatory framework for fixed income market by adopting internationally aligned standards for issuance and trading practices.
- Trading Platform: Development of an electronic fixed income and currency tradingplatform to facilitate bond trading, money market trading and foreign exchange trading.
- New Reference Rate: The SFC will encourage the HKEX to include a new reference rate under Swap Connect that reflects interbank financing costs in the Mainland.
3. Promoting Digital Assets Application & Innovation:
- Digital Bonds Adoption: Regularisation of the issuance of digital bonds to cover the use of digital currencies for settlement.
- Distributed Ledger Technology (DLT): The HKMA will explore innovative solutions and launch a legal review to foster DLT application in capital market.
- Digital Asset Platform: Establishment of a digital asset platform to provide end-to-end services in issuance and settlement of digital bonds.
- Virtual-asset Licensing: The SFC will enhance virtual‑asset licensing regimes and formulate specific regulatory guidelines to establish a clear compliance pathway for virtual‑asset service providers.
- Tokenised Investment Products: The SFC will refine the regulatory framework for tokenised investment products to enable the issuance and trading of tokenised products of gold and other suitable real‑world assets on licensed platforms.
- Stablecoins Trading: The SFC will promote the trading of regulated stablecoins on licensed virtual‑asset trading platforms and their utilisation in settling tokenised money market funds.
4. Strengthening Capital Markets:
- Listing Regimes: The SFC is exploring the streamlining of prospectus disclosure requirements to facilitate the listing of quality overseas enterprises.
- Dual Listings: The SFC and the HKEX will promote dual primary and secondary listing of overseas enterprises from Southeast Asia and Belt and Road countries in Hong Kong. Efforts will be made to add Kazakhstan’s qualifying exchanges to the list of recognised stock exchanges.
- Competitiveness Enhancement: The SFC and the HKEX will refine requirements concerning notifiable transactions, connected transactions and spin-offs.
- Specialist Technology Listing: The HKEX will review the market capitalisation threshold of specialist technology listing in response to the substantial volume of technology stocks listed in Hong Kong.
- Settlement Efficiency: A move towards a “T+1” settlement cycle for the cash market and the use of an e-HKD payment solution for after-hours trading of derivatives.
- Multi-tiered Derivatives System: Support for developing a diverse range of thematic, bond and commodity indices and launching more index-based ETFs and derivatives.
5. Promoting Asset & Wealth Management:
- REIT Regimes: Legislative proposals are being formulated to enable the privatisation or restructuring of real estate investment trusts (REITs) and to waive stamp duty for the transfer of non-residential properties into REITs that are seeking to list respectively.
- REIT Market Access: The SFC will streamline its procedures to attract overseas REITs to Hong Kong for dual listing and revise its frameworks to promote fund products innovation and widen investor choices.
- ETF Market Access: Enhancement of Mainland insurance funds’ investment in Hong Kong ETFs through mutual market access, expansion of eligible ETF products and cross-listing of ETFs on the HKEX and Southeast Asian exchanges.
- MPF ETF Investment: Lift the total investment limit on eligible index-tracking ETFs by Mandatory Provident Funds (MPF). See further details in the same publication here.
6. Expediting Gold & Metal Investment:
- CCASS: Official launch of a central clearing and settlement system (CCASS) for gold.
- Gold Futures Contracts: Release of details regarding the new RMB-denominated and physically settled gold futures contracts.
- Gold Holdings: The HKMA will explore an increase in the Exchange Fund’s gold holdings and participation in Hong Kong’s spot and futures markets.
- Tax Incentives: Implementation of a half-rate tax concession for physical commodity trading and a proposal to provide tax concessions for qualifying activities within the gold and commodity trading ecosystem.
- Metal Delivery Network Enhancement: Establishment of additional London Metal Exchange (LME) – approved warehouses in Northern Metropolis to enable gathering of physical delivery, financing and risk management.
7. Fostering Green & Sustainable Finance:
- International Sustainability Standards: Full adoption of the International Financial Reporting Standards – Sustainability Disclosure Standards (ISSB Standards) by large publicly accountable entities by 2028.
- Carbon Market: Exploration of Hong Kong’s participation in cross-boundary carbon trading.
- Green Market Profile: The HKEX will introduce a “Green Equity Designation Scheme” to raise the profile of green securities issuers.
Implications for the Financial Services Industry
The 2026 Policy Address sets out clear, diverse and holistic strategies: fostering the offshore RMB hub, embracing digital transformation and innovation (digital assets, stablecoins and tokenised products), promoting market efficiency and attractiveness (listing reforms, T+1 settlement cycle and multi-tiered derivatives system), enhancing asset management (tax incentives, ETFs and REITs), developing an international gold and commodity trading hub and advancing green and sustainable finance.
Industry players should review the implementation timeline and details of these initiatives thoroughly and assess how these amendments will affect their operation. As the market evolves, they should closely monitor announcements and additional guidance from the government and various regulators relating to these initiatives.
Conclusion
Hong Kong continues to demonstrate its determination and commitment to adapting and leading in the dynamic global financial landscape. The success of these initiatives will depend on close collaborations between regulators, industry stakeholders and professionals. It is hoped that with concerted efforts, this would unleash new opportunities and further reinforce Hong Kong’s standing as a leading international financial centre.
