Global Trustee and Fiduciary Services Bite-Sized Issue 1 2024

Global Trustee and Fiduciary Services Bite-Sized | Issue 1 | 2024 15 QUICK LINKS BENCHMARKS REGULATION CSDR CYBERSECURITY DEFI DIGITALISATION DORA ELTIF FSB FUND LIQUIDITY MONEYMARKET FUNDS OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG ASIA EUROPE IRELAND NORTH AMERICA UNITED KINGDOM Part B – Information on the sale of non-exchange-traded investment products Reporting Intermediaries which sold reportable non-exchange-traded investment products to In-scope Clients during the reporting period should also complete Part B to provide an overview of their selling activities, such as the transaction amounts by types of investment product, the top issuers of the investment products sold and the types of client. Part C – Supplementary information Reporting Intermediaries that are LCs with total transaction amounts of HK$1 billion or above during the reporting period or RIs with total transaction amounts of HK$30 billion or above should also complete Part C, which collects information such as the transaction amounts of investment products by types of investor and details of the top five investment products sold. Reporting timeline All Reporting Intermediaries should submit the completed questionnaires to the SFC through WINGS on or before the following dates: • Reporting Intermediaries completing Part A only 19 January 2024. • Reporting Intermediaries completing Part A and Part B only 23 February 2024. • Reporting Intermediaries completing Part A, Part B and Part C 8 March 2024. This survey will enable the SFC and the HKMA to better understand the industry landscape and market trends, supervise the selling practices of intermediaries, and coordinate their responses to address areas of common concern. Link to Circular here SFC Highlights Key Regulatory Work and Market Data in Quarterly Report On 7 December 2023 the SFC published its latest Quarterly Report to provide operational and financial highlights for the quarter from July to September 2023. It found on asset management, exchange-traded funds (ETFs) were a bright spot. Strong net inflows of $16.2 billion to Hong Kong-listed ETFs were recorded, while their average daily turnover (ADT) saw healthy growth (12%) from a quarter ago to $14.8 billion. A total of 175 SFC-authorised ETFs had a market capitalisation of $369.5 billion as at end-September. Turnover of Mainland-Hong Kong ETF Connect also reported robust growth, as southbound trading recorded ADT of $3.6 billion and accounted for a 15% share of the ADT for eligible Hong Kong ETFs in the quarter. This share of eligible ETFs’ ADT doubled on a six-month basis (i.e., from end-March). Apart from strong ETF data, the number of open-ended fund companies (OFCs) saw encouraging growth of 87% year-on-year to 187, as the SFC registered 36 new OFCs in the quarter. Hong Kong-domiciled funds recorded net inflows ($11.7 billion) for another quarter. The growth of SFC-authorised ESG funds also persisted, with their total number and AUM up 7.2% and 1.8% respectively from the prior quarter. To improve Hong Kong market liquidity, the SFC participated in the work of Task Force on Enhancing Stock Market Liquidity during the quarter, which led to the submission of a report to the Financial Secretary in October and implementation of certain measures as announced in the Chief Executive’s Policy Address. The SFC will work with Hong Kong Exchanges and Clearing Limited on the medium to long-term issues identified. Furthermore, the SFC witnessed growth in the number of licence applications received, up 13% from the quarter before and 6% from a year ago. It also granted 33 corporate licences during the quarter, mainly for asset management (Type 9) and advising on securities (Type 4). To reinforce market resilience, the SFC set out a comprehensive risk management framework for futures brokers after concluding its consultation. Link to Quarterly Report here