Global Trustee and Fiduciary Services Bite-Sized Issue 9 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 9 | 2023 7 QUICK LINKS CYBER FINTECH MONEY MARKET FUNDS SUSTAINABLE FINANCE/ ESG AUSTRALIA ASIA EUROPE NORTH AMERICA UNITED KINGDOM ii. Insider dealing perpetrated outside of Hong Kong, if it involves any securities listed on a recognised stock market, i.e., a stock market operated by the Stock Exchange of Hong Kong Limited, or their derivatives. The industry will have the opportunity to review the draft amendments during the legislative process. Considering the complex implementation issues raised by the respondents to the consultation, the SFC concluded that, pending further review, it will put on hold the other two proposed amendments, which concern the professional investor exemption and injunctions and other orders. However, the SFC will continue to monitor market developments and consider a full range of options to ensure investors are adequately protected. Such options may include enhancing the SFC’s disciplinary powers and other parts of the legal and regulatory framework. Link to SFC’s Consultation Conclusions here Hong Kong’s Asset andWealthManagement Business Fared on Par with Global Markets in 2022 On 4 August 2023, the SFC published a report on its annual Asset and Wealth Management Activities Survey, which recorded assets under management (AUM) of HKD30,541 billion (USD3,912 billion) and net fund inflows of HKD88 billion (USD11 billion) in 2022. The report states that the findings reflect the challenges faced by the global asset and wealth management industry. The AUM decline of 14% year-on-year was similar to the 15% drop for the AUM of worldwide regulated funds and slightly outran major market indices, while many other major fund markets saw net fund outflows. Hong Kong has shown signs of turning a corner since late 2022. The AUM of Hong Kong-domiciled funds rebounded 15% from the third quarter of 2022 to HKD1,335 billion (USD171 billion) as at end-June 2023. Net fund inflows of HKD69 billion (USD8.9 billion) were recorded during the fourth quarter of 2022 and the first half of 2023, representing over 300% increase from the net fund inflows of HKD17 billion (USD2.2 billion) for the first three quarters of 2022. Overall, the AUM of Hong Kong’s asset and wealth management business recorded long-term healthy growth of 143% over the last 10 years. Other highlights from the report include: • The private banking and private wealth management business alone registered net fund inflows of HKD121 billion (USD15 billion). • Mainland-related firms outperformed the industry average with net fund inflows of HKD132 billion (USD17 billion) and growth for their asset and wealth management business. • SFC-authorised environmental, social and governance (ESG) funds saw year-on-year growth of 8% in AUM and 86% in number. • The number of firms licensed to carry out asset management in Hong Kong increased 5% year- on-year and the total number of staff in the asset and wealth management business remained steady at 54,322. • Non-Hong Kong investors remained a major source of funding for the asset and wealth management business, accounting for 64% of the total AUM. Link to Asset andWealth Management Activities Survey 2022 here EUROPE ESMA Publishes its Latest Risk Monitor Report on Trends, Risks and Vulnerabilities On 31 August 2023, the European Securities and Markets Authority ( ESMA ) published its second Trends, Risks and Vulnerabilities ( TRV ) Report of 2023. Main findings from ESMA’s TRV No.2 2023: Securities markets : Equity markets rose in 1H23, even though the market stress related to US banks led to increased volatility and bid-ask spreads in March and April. Credit risk indicators showed mixed signals, with early signs of deterioration such as increasing corporate high-yield defaults and sovereign downgrades but limited movements on sovereign credit spreads.