Norman Chan, chief executive of the Hong Kong Monetary Authority (HKMA), has outlined his vision for Hong Kong as a private banking hub.
Date: June 15, 2012
Tags: Hong Kong, Regulation
Norman Chan, chief executive of the Hong Kong Monetary Authority (HKMA), has outlined his vision for Hong Kong as a private banking hub.
Speaking at a lunch jointly hosted by the Hong Kong Association of Banks and the Hong Kong Institute of Bankers, Chan outlined the business opportunities and potential for the private banking industry in Hong Kong, as well as developments in the regulatory framework and the need to enhance the competency of industry practitioners.
Not only will the increasing number of wealthy individuals in China and the rest of Asia generate demand for private banking services, Hong Kong has a robust legal framework and a simple tax system that make it a very attractive place for people outside of Hong Kong to park and manage their wealth, said Chan.
Hong Kong also benefits from being the most important gateway for capital flows into and out of China, he added.
Regarding the regulatory framework, Chan said Hong Kong needs a regulatory framework that is user-friendly for private banking clients and yet sufficiently-robust to provide appropriate investor protection.
He explained that the current framework is basically a disclosure-based regime, supported by suitability assessment by intermediaries at the point of sale, the know your client (KYC) process and client risk-profiling. While private banking clients cover a wide spectrum of individuals, they do not have to be treated in exactly the same way in the process of making investments.
The regulator said that they have agreed to a clear and practical definition of “private banking customer” and the next step is to consider specific measures that would help make private banking more “user friendly” without compromising the need to accord appropriate protection to private banking customers.
Chan also talked about the need to enhance the competency of industry practitioners.
"The HKMA encourages the industry to promote a competency framework for new entrants and ongoing professional training,” he said. “The financial market is very dynamic and rapidly changing. The industry therefore should ensure that staff are well-equipped with the necessary technical and market knowledge and skills in performing their jobs.”
More details:
http://www.hkma.gov.hk/eng/key-information/speech-speakers/ntlchan/20120612-1.shtml
