Ashley Alder will step down as chief executive of the Securities and Futures Commission early this year to become chairman of the UK Financial Conduct Authority (FCA).
During his tenure, he implemented a number of regulatory measures. Some people praised him for actively cracking down on market misconduct, but others criticized that the supervision was too strict and stifled market opportunities.
Coincidentally, after the government officially raised the stamp duty on stocks in August last year, the average daily turnover of Hong Kong stocks shrank sharply, making small and medium-sized brokerages in a "worse" situation.
With the new government on the stage, there have been many voices in the financial sector calling for "removing walls and loosening bonds". In an exclusive interview with "Hong Kong 01", Secretary for Financial Services and the Treasury Xu Zhengyu emphasized that the market should not use "loose and tight" to measure the strength of supervision. The policy is more based on long-term and sustainable development, and it also points out that the competitiveness and attractiveness of the Hong Kong market has been strengthened, and the financial industry has benefited from the continuous "strengthening of the body".
Xu Zhengyu pointed out that the government, as a market regulator, needs to consider the sustainability of the policy, and reiterated that the policy goal of raising the stock stamp duty is clear.
(Photo by Liao Yanxiong)
The government raised the stamp duty on stocks in August last year. Since then, investment sentiment has deteriorated. The first is the drop in the average daily turnover of the securities market. The average daily turnover in the first half of last year was 188.2 billion yuan, but it fell to 136.77 billion yuan in the first half of this year, a decline More than twenty-seven.
In the past, the government has introduced a number of financial policies with remarkable results. The addition of stamp duty on stocks has caused a lot of controversy.
Xu Zhengyu, Secretary for Financial Services and the Treasury, said in an interview that the government, as a market regulator, must consider policy continuity and scalability, "Doing business is not only about a low-cost place, but also (provides) a stable environment, etc. They plan the use of resources to do the business they want to do.”
He did not directly respond to when to review the stamp duty on stocks, but reiterated that the policy objectives are clear and the transaction value has fallen. In addition to stamp duty, it is also affected by multiple factors such as market changes and the international situation. Xu Zhengyu took the reform of the listing system in 2018 as an example, which brought a large number of new economy and biotechnology companies to list in Hong Kong, changing the market ecology and attracting investors to invest in Hong Kong stocks.
The reform of Hong Kong's listing system in 2018 is an example, with a large number of new economy and biotech companies coming to Hong Kong to list.
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Regulatory measures are not measured in terms of "loose and tight"
It is true that after the reform of the listing system, many Chinese concept stocks have returned to Hong Kong for listing, but the potency of this “stimulant” seems to be weakening. In the past two years, new stock listings (IPOs) have been quiet. Last year, global fundraising fell out of the top three and ranked fourth. In the first half of this year, the number of listings dropped to 10th, and the amount of funds raised dropped to 9th.
The poor market conditions are attributable to many factors. Some commentators believe that the government should relax supervision at this time, but Xu Zhengyu pointed out that from the perspective of regulators, measures are not measured by "relaxation and tightening" but whether they can be sustained. Tight and easy, but can the market be sustainable?” He took the listing system reform in 2018 as an example. After the listing regulations were relaxed, Hong Kong stocks “has changed in quantity and quality”, and Hong Kong has become the world’s second largest biotech company to go public. the capital market, reflecting that the measures will help the market continue to develop.
As for the regulation of "new finance" such as virtual currency, the government's principle is the same. For example, by amending the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, any unlicensed virtual asset service provider is prohibited. The purpose of conducting business in Hong Kong, including various cryptocurrency exchanges, is also to hope that the relevant exchanges will develop more steadily. "
"Building Bridges and Building Roads" Actively Explore New Opportunities
It is understandable for the government to consider the effectiveness of the policy and its impact on market development from a long-term perspective. However, for the industry, especially the local small and medium-sized securities firms, the shrinking transaction volume, the decline in the number of IPOs, and the competition from Internet platforms are the current problems. .
Regarding the voices of the industry, Xu Zhengyu pointed out that the government has been actively exploring opportunities for the local financial industry, including the issuance of retail green bonds by the government and the upcoming issuance of bank bonds. Securities companies can participate. At the same time, they are also following up with the mainland to follow up local securities companies to participate in cross-border transactions. The situation of “Wealth Management Connect”; during the epidemic, cash subsidies were also provided directly to securities companies.
He bluntly said that the "kingdom" of helping the industry is to continue to increase market opportunities, make good use of Hong Kong's advantages as an international financial center, strengthen connectivity with the mainland, and encourage local brokerages to improve their technological level.
Xu Zhengyu said that as mentioned in his blog, the Treasury Bureau should "earn more, save more, and create opportunities" for the country and Hong Kong. Future work includes deepening the "interconnection" mechanism; further optimizing the listing system, and considering allowing Unprofitable "hard technology" companies come to Hong Kong for listing, etc., "Do a good job of building bridges and roads, the bridges will become wider and wider, and the more things will be put in... Continue to keep fit, everyone will use you If you think it is useful and efficient, you will continue to put things (funds) in the market, so the regulation is not determined by loose or tight, but how to do a good job of smoothing.”
Interview | Seize the "3D" Opportunity to Maintain Status in the Reverse Globalization Xu Zhengyu: Make Hong Kong Make a Difference
