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1、May 2021Revitalisation of Hong Kongs Real Estate Investment Trusts Market-Promoting LiquidityFSDC Paper No.48ContentI.Executive SummaryII.Background III.Global Development Trends 1.REITs Gaining Increasing Popularity 2.Proliferation of New REITs Asset Types 3.Historial performance of REITs and the I

2、mplication of a Low-Interest EnvironmentIV.Challenges and Opportunities for Hong Kong 1.Untapped Potential of H-REITs 2.Capturing Growth Opportunities V.Policy Recommendations 1.Refining the REITs Value Proposition 2.Tapping into Cross-Boundary Investor Base 3.Diversifying REITs Product Offerings 4.

3、Exploring Tax and Financial Incentives 5.Implementing Regulatory Enhancements Expeditiously 6.Stepping up Market Promotion and Regulatory CommunicationVI.Conclusion Appendix.Cross-Market Comparison of REITs Regimes292122I.Executive SummaryReal estate investment trusts(REITs)hav

4、e gained wide popularity across the globe over recent years,having undergone significant growth in total market capitalisation and been introduced in more than 40 jurisdictions worldwide.As Asias international financial centre,Hong Kong saw the inception of its REITs market in 2003 with the enactmen

5、t of the Code on Real Estate Investment Trusts(the REIT Code).As at the end of April 2020,there were 10 REITs listed and trading on the market with an aggregate market capitalisation of around HK$244 billion.Although Hong Kong is one of the earlier markets to have rolled out its REITs regime followe

6、d by various subsequent market development endeavours,it appears that REITs as an asset class is yet to garner sufficient traction,especially when compared to the other fast growing financial products available on the market.Nevertheless,it is our belief that Hong Kong is in a unique position to cap

7、ture the rising opportunities to revitalise its REITs market,by capitalising on the citys long-established and widely recognised legal system,simple and low taxation,vibrant and diversified pool of market participants,as well as ample supply of financial and professional services practitioners.In fa

8、ct,as announced in the 2021-22 Budget,the Government has committed to providing subsidies for qualifying Securities and Futures Commission(SFC)-authorised REITs to cover 70%of listing expenses paid to local professional service providers with a cap of HK$8 million each REIT.1 Such initiative,togethe

9、r with the emphasis placed on promoting REITs in Hong Kong in the 2020 Policy Address,are bringing positive sentiment to the market.To this end,the Financial Services Development Council(FSDC)has formed a dedicated Working Group comprising industry experts to revisit a previous paper titled“Developi

10、ng Hong Kong as a Capital Formation Centre for Real Estate Investment Trusts”2(2013 FSDC Research Paper)released by the FSDC in November 2013,in an effort to identify measures that can help bring about further growth momentum to Hong Kongs REITs market.This paper sets out policy recommendations arou

11、nd the following areas:The 2021-22 Budget,https:/www.budget.gov.hk/2021/eng/budget23.htmlFSDC Research Paper No.04,November 2013,https:/www.fsdc.org.hk/en/press-publications/developing-hong-kong-as-a-capital-formation-centre-for-real-estate-investment-trusts12Refining the REITs value proposition;Tap

12、ping into cross-boundary investor base;Diversifying REITs product offerings;Exploring tax and financial incentives;Implementing regulatory enhancements expeditiously;and Stepping up market promotion and regulatory communication.1Hong Kongs success story as an international financial centre is built

13、on the citys long-established and widely recognised legal system,simple and low tax regime,vibrant and diversified market participants,as well as ample supply of financial and professional services practitioners.These qualities constitute the bedrock of Hong Kongs world-class banking,equities,fixed

14、income and derivatives markets and beyond.Among the various asset classes,REIT has gained wide popularity around the globe but is yet to gather remarkable momentum in Hong Kong.Over the years,the Government and financial regula-tors have taken consistent efforts to improve the market and regulatory

15、environment for REITs in Hong Kong(H-REITs).A few recent measures include the announced subsidies for REITs issuances,the SFCs amendments to the REIT Code,and the Mandatory Provident Fund Schemes Authority(MPFA)s relaxation of investment limit in H-REITs,among others.However,due in part to the multi

16、tude of financial products and services available on the Hong Kong market,REITs have not been at the centre of market players attention and,therefore,their development is not fully in sync with that of other rapidly expanding markets.Globally,the REITs market has seen tremendous growth and evolvemen

17、t over recent years,driven by a combination of technological,economic and policy advancements achieved.Against this backdrop,the FSDC considers it an opportune time to revisit and potentially renew Hong Kongs approach to developing REITs,in order to capture the ample opportunities arising from the e

18、mergence of many new asset types,the development of the Guangdong-Hong Kong-Macao Greater Bay Area(the GBA),and global investors increasing preference for stable income streams and asset diversification.While the exact form and structure of REITs may differ by jurisdiction,generally speaking,REITs a

19、re trusts or companies that own and actively manage portfolios of income-producing real estates.As demonstrated in the 2013 FSDC Research Paper,a typical REIT in Hong Kong consists of a trustee,a manager(either external or internal)and a sponsor.The same structure,as illustrated below,is also adopte

20、d in Singapore.II.BackgroundStructure and Characteristics of REITsFigure 1.A typical REIT structure in Hong Kong and SingaporeUnitholdersTrusteePropertiesProperty ManagerManagerSponsorWholly/partlyownedDistributionsHolds properties ontrust for unitholdersTrustees feeDistributableincomeManagementfeeM

21、anagementfeePortfolio managementservicesProperty managementservicesREITEquity interestServicesFlow of fundsHolds units/shares in REITSource:FSDC2The defining feature of REITs in Hong Kong is the mandatory dividend distribution to unitholders as required by the REIT Code,leading to its hybrid charact

22、eristics and unique appeal to investors-that is,enabling investors to acquire ownership of the underlying assets while receiving steady income streams generated by those assets.From the sponsors perspective,listing its assets as REITs is an effective way to monetise the income-generating assets whil

23、e retaining substantive control over portfolio and property management of such assets,and facilitating a transformation of business model from asset heavy to asset light.Table 1.Key benefits of REITs for sponsors and investorsKey benefits for sponsorsKey benefits for investorsAllowing sponsors with

24、income generating real estate assets to monetise prior investments while retaining substantive control over portfolio and property management of such assets,transforming the business model from heavy-asset to light-asset;Reinvesting funds raised through REITs listings into other projects,which may i

25、n turn become pipeline projects acquired by the REITs;andEnabling sponsors to expedite the project cycle and put more focus on their core competencies to drive long-term growth of their businesses.In most cases,REITs are listed on stock markets and their shares or units are publicly traded like othe

26、r stocks,providing investors with:Easy access to local/overseas real estate assets managed by licensed asset managers;Recurring rental income;The opportunity to participate in large scale real estate investments by smaller investment lots;Higher level of liquidity than real estate assets;andTranspar

27、ency and accountability ensured by rigorous listing rules at least at similar level to those for listed companies.Source:FSDC3Since first introduced to the US in the 1960s,REITs have grown significantly in scale and influence as an asset class across global markets.By the end of 2020,REITs had been

28、introduced in more than 40 jurisdictions.Note:Year of adoption of REITs rulesSource:National Association of Real Estate Investment Trusts(NAREIT)III.Global Development Trends1.REITs Gaining Increasing PopularityYearNumberJurisdictions-19-20617122Netherlan

29、ds,New Zealand,United StatesAustraliaBelgium,Brazil,Canada,Greece,Singapore,TurkeyBulgaria,Costa Rica,Finland,France,Germany,Hong Kong,Israel,Italy,Japan,Malaysia,Pakistan,South Korea,Spain,Taiwan,Thailand,United Arab Emirates,United Kingdom Bahrain,Hungary,India,Ireland,Kenya,Mexico,Oman,Philippine

30、s,Portugal,Saudi Arabia,South Africa,VietnamMainland China,Sri LankaAs at March 2021,the total market capitalisation of global REITs reached US$2,190.2 billion,having increased nearly 70%from US$1,294.6 billion as at September 2013 when FSDCs previous REIT research paper was released.The global comp

31、etitive landscape remains generally unchanged,with the worlds seven largest REITs markets still dominating and making up approximately 90%of total market capitalisation.The US remains the most sizeable market,accounting for 66%of the world total,increased by 8 percentage points from 2013.Table 2.Int

32、roduction of REITs in global markets4Figure 2.Market capitalisation of the seven largest REITs markets(September 2013 and March 2021)If COVID-19 had a silver lining,it would be its catalysing effect for expediting penetration of technological adoption in our daily life.People around the world are tu

33、rning to virtual channels for communication,work and business,for the extra flexibility provided during times of restricted physical contact.Undoubtedly,these changes have posed challenges for the traditional real estate assets,such as office buildings and shopping malls;on the other hand,however,th

34、ey have added fuel to the proliferation of new types of REITs assets that had been emerging over the past years.These assets include logistic parks,data centres-sometimes referred to as“new infrastructure”-as well as assets essential to our daily life and well-being such as healthcare facilities and

35、 student housing.In the US,these newer types of assets have proven their attractiveness to global investors with higher rates of return throughout past years.Based on data by National Association of Real Estate Investment Trusts(NAREIT),REITs in emerging real estate sectors,including industrial,infr

36、astructure,and data centre,recorded notably higher returns than the total average during the period of 2015-2020.2.Proliferation of New REITs Asset TypesSource:Bloomberg,FSDC September 2013March 2021Hong Kong1%Others11%Singapore3%UK4%Canada3%Australia5%Japan7%US66%Hong Kong2%Others12%Singapore3%UK5%

37、Canada4%Australia10%Japan6%US58%5Figure 3.US equity REITs-total annual return by industry(2015-2020)Figure 4.Asia Pacific REITs Indexed total returns(2012-2020)Source:NAREITSource:Asia Pacific Real Estate Association(APREA)In Asia,industrial REITs,particularly during the COVID-19 pandemic,have demon

38、strated higher resilience and profitability when compared to hotel,office and retail REITs.-20%-10%0%10%20%30%40%50%60%2001820192020IndustrialInfrastructureData centreTotal average90034039020001820192020(January 2012=100)HotelIndustrialOfficeRetail6Althoug

39、h REITs are generally considered more similar in nature to fixed income instruments with their recurrent rental incomes and mandatory dividend payouts,their historical long-term return is proven to be decent and comparable to those of certain groups of both equities and bonds,as shown by a compariso

40、n of indexed total returns of REITs,mid-to-large cap equities and government bonds from 2002 to 2020.As global economies struggle to find their way to recovery from the economic downturn caused by the pandemic,it is generally expected that interest rates are likely to remain at relatively low levels

41、 in nearly all major economies in the near term.What this may mean for the performance of REITs is two-faceted.While the uncertain global economic prospects implied by low interest rates may cast doubt on the growth of REITs earnings and dividends,their cost of debt-which REITs traditionally rely he

42、avily on-would also be lowered.In addition,having historically displayed low correlations to many of the major asset classes,REITs offer attractive diversification to investors,a key consideration for many investors especially in the current situation.3.Historical performance of REITs and the Implic

43、ation of a Low-Interest EnvironmentFigure 5.Indexed total returns of REITs compared with equities and government bonds(2002 2020)Source:APREA 0050060070080090020022004200620082001620182020(January 2002=100)GPR/APREA Composite REIT IndexMSCI Asia Pacific AC Equities IndexJPM Gov

44、ernment Bonds-Asia Pacific 7IV.Challenges and Opportunities for Hong KongOver the years,the Government and regulators have worked continuously to introduce policy enhancements for REITs,which have been well received by market players.To list out a few initia-tives that have been rolled out since the

45、 publication of the 2013 FSDC Research Paper:Despite the collective efforts,Hong Kongs REITs market has not been the most vibrant among its Asian peers,as shown by the following metrics.Number of listings As of the end of March 2021,there were 12 listed H-REITs(2 suspended),comparing to 43 in Singap

46、ore,49 in Australia and 61 in Japan.In 2014,the REIT Code was amended to give REITs the flexibility to invest in property development projects and financial instruments,subject to limitation.Since then,a number of REITs have made use of the extra flexibility to hold financial instruments and propert

47、y development projects.One REIT has completed a property development project.3In May 2020,the MPFA revised the guidelines to improve MPF investment options,among which included expanding the asset allocation and markets for REITs,lifting the restriction of no more than 10%of the assets of MPF funds

48、invested in REITs listed in Hong Kong,the UK,the US or Australia.In December 2020,the SFC amended the REIT Code upon completion of an industry consultation,providing H-REITs with more flexibility in making investments which include allowing REITs to invest in minority-owned properties;allowing REITs

49、 to invest in property development projects in excess of the existing limit of 10%of gross asset value(GAV);and increasing the limit on aggregate borrowings to 50%of their GAV.Up to date of this report,two REITs have invested in minority-owned properties since the REIT code was amended.1.Untapped Po

50、tential of H-REITsFigure 6.REITs free-float market capitalisation (2008 2020)Source:APREA Figure 7.Number of REITs listings(2017 March 2021)SFC,Consultation Paper on Proposed Amendments to the Code on Real Estate Investment Trusts(June 2020),https:/apps.sfc.hk/edistributionWeb/api/-consultation/open

51、File?lang=EN&refNo=20CP23020406080020082001620182020US$billionAustraliaHong KongJapanSingaporeMarket capitalisation As at the end of March 2021,total market capitalisation of REITs in Hong Kong,Japan,Australia and Singapore stood at US$31 billion,US$150 billion,US$110 billion a

52、nd US$79 billion,respectively.Similarly,as for free-float market capitalisation shown below,Hong Kongs REITs market has also been lagging behind other major markets in the region.Hong KongSingaporeJapanAustraliaMarch 202506070Source:Stock Exchange of Hong Kong(HKEX),Singapore E

53、xchange(SGX),Investment Trust Association of Japan,Australian Securities Exchange(ASX),China International Capital Corporation8Trading value Trading of REITs in Hong Kong is not as active as in other APAC markets.On an average day in 2020,trading value of H-REITs was US$77.8 million,a fraction of th

54、e US$227 million in Singapore and US$301 million in Australia(converted at 2020 year-end exchange rate).Figure 8.Average daily trading value of REITs in 2020Source:HKEX,SGX,ASX,BloombergNote:Converted to US$at year-end exchange ratesThe chart below,which shows the proportion of REITs represented in

55、the GPR General Quoted Index4,offers an interesting angle on the acceptance of REITs in different countries by the international financial community.Evidently,the proportion of REITs versus non-REITs in Hong Kong is significantly lower than in all other countries concerned,perhaps to some extent rev

56、ealing a higher preference given to other listing vehicles,mainly listed companies,over REITs for making investments in Hong Kong real estate.Figure 9.Proportion of REITs in listed real estate represented in GPR General Quoted Index(as at December 2020)Source:Global Property Research,APREAGlobal Pro

57、perty Research General Quoted Index is a subset of the GPR General Index with a base date of 31 December 1983 and tracks over 600 of the largest real estate companies worldwide with over US$50 million in market capitalisation.40.050.0100.0150.0200.0250.0300.0350.0Hong KongSingaporeAustraliaUS$mil0%1

58、0%20%30%40%50%60%70%80%90%100%AustraliaHong KongJapanSingaporeREITsNon-REITsTo gauge what growth potential lies ahead the H-REITs market,another benchmark is the capitalisation of REITs as a percentage of equities.As shown in the chart below,market capitalisation of REITs as a percentage of the equi

59、ty market generally ranges from 5.9%in Australia to 0.4%in Hong Kong,with Singapore being the exception,where the REITs market has undergone tremendous growth compared to other sectors in the past years.Granted,this ratio offers only a rough reference point,as it reflects the distinctive structures

60、of the various markets which,in Hong Kongs case,are characterised by its enviable equity markets.Nonetheless,it presents an idea of the room for growth for H-REITs in terms of market capitalisation,if their potential can be fully tapped into.Figure 10.Market capitalisation of REITs as percentage of

61、the stock market as at March 2021Source:Bloomberg,FSDC0%2%4%6%8%10%12%14%Hong KongUSAustraliaJapanCanadaUKSingapore9REITs are organic components of the financial services industry,and should not be left out in the bigger picture of Hong Kong as an international financial centre for a multitude of re

62、asons.In addition to the 7.9%of total employment created by the financial services industry(including insurance)in Hong Kong,the real estate industry alone accounts for another 4.3%,as at the end of 20205.In the face of the fundamental transformation driven by digitalisation,REITs have a part to pla

63、y in facilitating and financing such transformation.Zooming in on Hong Kong,ample growth opportunities lie ahead to be captured to revitalise Hong Kongs REITs market.At present,the H-REITs market has relatively limited choices of underlying asset types,with the majority of H-REITs investing in resid

64、ential and commercial properties such as shopping malls,office buildings,industrial buildings and hotels.The result of such a lack of diversification in REITs assets could lead Hong Kong to missing out on the growth momentum presented in the logistics,infrastructure,healthcare and other emerging sec

65、tors.Revitalising the REITs market has merits beyond just commercial.When explored in tandem with other public efforts,synergy can be created to achieve more for our city.For example,integrating transportation infrastructure across the GBA presents tremendous opportunities for logistics companies th

66、at have warehouse assets across the region,which can potentially become quality REITs assets in turn.Considering REITs in the bigger context of such infrastructure integration,such upgrading will bring new opportunities for the financial market while supporting the Governments efforts to foster flow

67、 of goods,capital,information and naturally,people-across the GBA.Similarly,other areas including construction of local infrastructure,improvement on healthcare facilities,promotion of the use of 5G can also be explored.2.Capturing Growth OpportunitiesSynergising REITs with existing public initiativ

68、esFigure 11.Free-float market capitalisation by industry Sector(as at the end of 2020)Source:APREA020406080100120140AustraliaHong KongJapanSingaporeUS$billionDiversifiedHealthcareHotelIndustrialOfficeOtherResidentialRetailCensus and Statistics Department,“Quarterly Report on General Household Survey

69、,October December 2020”(published in February 2021),https:/ww-w.censtatd.gov.hk/en/data/stat_report/product/B1050001/att/BQQ04B0100.pdf510In addition to local assets,overseas issuers,particularly those in emerging markets in Asia and along Belt and Road,are also gaining prominence with th

70、e rapid urbanisation of their economies.Hong Kong,having long successfully played the role as a super-connector and investment gateway,has great potential to grow into a regional REITs hub if proactive actions can be taken to capture such cross-boundary/cross-border opportunities.Among others,divide

71、nd withholding tax governed by the home jurisdictions would affect returns and appeals of REITs underlying assets and,therefore,the citys role as a REITs hub.Capturing regional growthOne of Hong Kongs unique strengths is its deep RMB liquidity pool at an enviable level of around RMB 750 billion.6 Al

72、though the first RMB-denominated REIT was listed on the HKEX as early as in 2012,more RMB REIT listings are yet to be seen,and the same holds for the first dual currency trad-ing REIT.Exploring the role of REITs in RMB internationalisation can expand the range of RMB prod-ucts available,whereby impr

73、oving the attractiveness of Hong Kong REITs.Mobilising the offshore RMB poolMainland authorities announcement to pilot and foster infrastructure REITs in China(C-REIT)and the subsequent promulgation of relevant supporting documents and rules-the latest of which include detailed implementation rules

74、by the Shanghai and Shenzhen Stock Exchanges.As of 6 May,five REITs had filed their listing applications at the Shanghai Stock Exchange,and four at the Shenzhen bourse.7 It presents an unprecedented window for Hong Kong to further its REITs market riding on this momentum.REITs can also be considered

75、 in combination with the development of the GBA,through which Hong Kongs close economic and financial ties with the Mainland have been strengthened further and to which infrastructure construction is a key driver of the integrated growth.REITs can be utilised to further improve the efficiency of res

76、ource allocation in infrastructure in the GBA,to promote the implementation of the current economic growth strategy and the adjustment of financial structure,helping with the industrial upgrading in the field of real estate and infrastructure,invigorating the assets of issuers and enriching the inve

77、stment choices of investors.Riding on the C-REITs and GBA momentumHong Kong Monetary Authority,Monetary Statistics for March 2021,https:/www.hkma.gov.hk/eng/news-and-media/press-releases/2021/04/20210430-7/Shanghai Stock Exchange,http:/ Stock Exchange,http:/ RecommendationsWith an aim of furthering

78、Hong Kongs REITs markets,the FSDC has formed a dedicated Working Group comprising industry experts to look into relevant matters.As a revisit to FSDCs previous research paper on REITs and based on market views consolidated by the Working Group,the following policy recommendations are proposed.Among

79、others,liquidity has been identified by the Working Group and practitioners as one of the most critical components for a REITs market to sustain its appeal to market participants.For investors,higher liquidity is associated with higher trading efficiency,lower trading costs and lower price volatilit

80、y;for sponsors,higher liquidity translates into ease in capital raising and fairer price valuations;for intermediaries,more deals and transactions taking place in more liquid markets means more business opportunities and naturally,more resources invested in the line of business.Most importantly,liqu

81、idity links each and every one of the market participants together and creates a virtuous cycle for the market to grow organically and sustainably.In this connection,the Working Group proposes the following policy recommendations around the central objective of increasing market liquidity in six are

82、as:The FSDC also notes that the announcement to foster development of REITs in the Policy Address 2020 and the subsequent announcement to provide subsidies for REITs in the 2021-2022 Budget have both been well received by market practitioners.With collective efforts by all stakeholders,Hong Kongs RE

83、ITs market is poised to reach new heights.Refining the REITs value proposition;Tapping into cross-boundary investor base;Diversifying REITs product offerings;Exploring tax and financial incentives;Implementing regulatory enhancements expeditiously;and Stepping up market promotion and regulatory comm

84、unication.From the age of farming to industrialisation and then digitalisation,the way the land is deployed for utility and economic output has gone through profound changes.For this reason,how real estate assets are defined,and correspondingly,how the REITs market is developed,should be revisited f

85、rom time to time.Hong Kong long prides itself in the citys well-established legal system,simple and low tax regime,strong capital raising capabilities,and abundance of world-class professional service providers and talents.These competitive advantages have proven to be the cornerstones of the vibran

86、t financial markets,and widely apply to all kinds of financial products and services,the real estate market included.However,in the face of the competitive landscape of global REITs,it is believed some of these unique edges that resonate the most with the international financial community,which prev

87、iously may not have been articulated enough,should be highlighted more in a refined,more consolidated value proposition of Hong Kong REITs.1.Refining the REITs Value Proposition12Among others,it is believed Hong Kongs established regulatory regime which allows various asset types to list as REITs,Ho

88、ng Kongs simple and low tax regime,as well as the vibrant offshore RMB asset market,have much value to bring to the REITs market.A clear message should be conveyed to highlight that Hong Kong is welcoming of different asset types to list as REITs,although not many precedents can be referenced.A REIT

89、 is defined in the SFCs REIT Code as“a collective investment scheme constituted as a trust that invests primarily in real estate with the aim to provide returns to holders derived from the rental income of the real estate”,and should dedicate investments in real estate that generates recurrent renta

90、l income,and distribute a significant portion of income to unitholders in the form of regular dividends,inter alia,to be authorised by the SFC.In other words,there is no restriction as to what industries H-REITs can invest in and Hong Kong is ready for and welcoming new asset types to be listed as l

91、isting.Actions speak louder than words.It is reported that a logistics-related REIT,sponsored by a key player in the Mainlands logistics market that will inject three logistics centres located in the Mainland and Hong Kong,filed its listing application8 on 10 Feb 2021 and started marketing the publi

92、c offering on 5 May.Scheduled to debut on 17 May,it may have been successfully listed by the time this paper is published,to become the first logistics related REIT in Hong Kong.If so,it would provide much refer-ence for simlilar assets,addresing concerns of potential REITs sponsors over uncertainty

93、 of the regu-latory approach towards new REITs asset types.(i)Hong Kong welcomes different kinds of income generating assets to list as REITsGlobally,there are a number of jurisdictions that provide specific preferential tax treatment for REITs in an effort to increase their overall attractiveness.F

94、or instance,the Inland Revenue Authority of Singapore(IRAS)provides tax transparency treatments for eligible REITs in Singapore.Without a similar arrangement in Hong Kong,one may be given the inaccurate impression that H-REITs are in a significantly disadvantaged position in terms of taxes.For this

95、reason,it should be emphasised that Hong Kongs territorial tax system,which does not impose tax on offshore profits,dividends or value-added tax(VAT),automatically applies to H-REITs.What this means for REITs is exemption from profits tax and VAT.For investors,either local or foreign,individual or i

96、nstitutional,no tax is imposed on capital gain or dividend income from investing in REITs.These terms could in fact be more preferential,subject to circumstances,as compared to some leading markets.(ii)Hong Kongs simple and low tax regime benefits REITsHKEX News,https:/www1.hkexnews.hk/app/appindex.

97、html?lang=en813Dual currency trading can provide REITs with the flexibility to manage currency risks by potentially aligning the currencies in which revenues are received and dividends distributed.Dual currency trading is generally welcomed by REITs and Exchange Traded Funds(ETFs),particularly in ca

98、ses where the underlying assets and the listed instruments are denominated in different currencies.In the Singapore market,for instance,13 of the 15 dual currency products listed on the Singapore Exchange are ETFs and REITs.9 Although Hong Kong is yet to welcome the first dual currency REIT,the supp

99、orting market regime and infrastructure has been in place.The Dual Tranche,Dual Counter(DTDC)model10 introduced in 2011,which allows issuers to list two tranches of shares and ETFs in different trading currencies,has been running smoothly since its establishment.More importantly,what underpins the a

100、ttractiveness of trading in RMB is the deep RMB liquidity pool,currently at a level around RMB750 billion,a significant amount of offshore capital looking to be invested in RMB denominated assets.(iii)Dual currency trading is available for REITsHong Kong has long been the investment gateway to and f

101、rom the Mainland.The introduction of the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connects was a milestone achievement that further cemented this role and opened the door for Mainland and international investors to trade in each others markets.Nonetheless,not having been included as eligible

102、securities under the Stock Connect schemes yet,REITs have not been able to leverage these existing connectivity regimes.In this connection,it is proposed to include REITs as eligible securities under the Stock Connect schemes,thereby allowing two-way REITs investment in each others market.Initially,

103、when the first listed C-REIT is still on the way,such arrangement can start with Southbound first,namely allowing eligible Mainland investors to invest in H-REITs.Such would present an opportunity for Mainland investors to participate in a well-established offshore REITs market in advance of the off

104、icial rollout of C-REITs,whereby accumulating evaluation and trading experience and paving way for the development of C-REITs.Once the C-REITs become available,the arrangement can be expanded to two-way trading,allowing both Mainland and Hong Kong/international investors to invest in available REITs

105、 products in each others market.The benefits would be on different levels:international capital seeking to increase their stake in Mainland assets,particularly in infrastructure sectors,will be granted such access conveniently;Mainland investors looking to diversify their global allocation can lever

106、age the platform to invest in regional and global real estate assets through Hong Kong.In short,inclusion of REITs under the Stock Connect schemes will not only be an expansion of the existing market connectivity mechanisms,but also facilitate the efficient matching of real estate assets with cross-

107、boundary capital,supporting regional economic growth and restructuring,thus establishing Hong Kong as a regional REITs investment hub.To take one step further,if and when an“ETF Connect”will become possible in the future,REIT ETFs should also be considered for being included as eligible products und

108、er“ETF Connect”.2.Tapping into Cross-Boundary Investor BaseSingapore Exchange,List of Securities with Dual Currency Trading,available at https:/ Tranche,Dual Counter Model,available at https:/.hk/Global/Exchange/FAQ/Featured/RMB-Readiness-and-Services/Dual-Tranche-Dual-Counter-Model?sc_lang=en91014A

109、s mentioned earlier,the underlying assets of REITs are becoming increasingly diversified in leading markets.More infrastructure,logistic parks,data centres,healthcare facilities,residential housing including retirement housing and student housing,are being listed and traded in the form of REITs.It i

110、s worth noting that the key to building competitiveness in REITs,as from experience of the most influential markets,is to establish an ecosystem around REITs that consists of both traditional and new real estate assets and a variety of financial products derived from REITs,as well as a cluster of is

111、suers,investors,analysts and other service providers around REITs.As of the completion of this report,all of the 10 H-REITs listed and traded are more traditional in terms of underlying assets,mostly holding general residential and commercial properties in their portfolios,such as shopping malls,off

112、ice buildings,industrial buildings and hotels.With Hong Kong being the worlds second largest biotech financing centre,tier 1 data centre hub in Asia11,as well as the“super-connector”for the Belt and Road Initiative,there is much room for H-REITs to grow by bridging the financing gaps in these market

113、s.One example would be the rising investor interest in quality healthcare assets resulted from the COVID-19 pandemic.Currently,these investors would have to turn to other markets for such investment opportunities in healthcare REITs.More important than the apparent commercial benefits,healthcare REI

114、Ts,and REITs in relation to social security housing/government subsidised housing for the elderly,will stimulate development of and investment into these asset classes which may benefit the local community.3.Diversifying REITs Product OfferingsCBRE,Asia Pacific Data Centre Trends H1 2020,https:/ eff

115、ective way to increase trading liquidity is to introduce a market making mechanism for REITs.By serving as counterparts of buying and selling orders,market makers can bring immediate liquidity to the market.In fact,market making is available for a REIT ETF listed on the HKEX,as well as for options o

116、n an H-REIT.Similar market making mechanisms can be applied to REITs themselves,and certain incentives,for example,discounted trading fees,can be considered by the HKEX to encourage initial participation.Once market liquidity is gradually built up and a critical mass formed,H-REITs can thrive on its

117、 own on a fast-growing trajectory.15Another area for growth is infrastructure.As mentioned in Our Hong Kong Foundations Land and Housing Policy Research Report,there has been insufficient investment in local infrastructure,leading to the gradual loss of the competitive edge of the logistics industry

118、12.Likewise,the long investment cycle and uncertain exit channels are main concerns of capital mulling over Belt and Road projects which are mostly infrastructure related.For reasons mentioned earlier,Hong Kong is uniquely positioned to build an edge by providing more varieties in the underlying ass

119、ets of H-REITs,to appeal to a broader range of investors with different risk appetites and investment preferences.REIT ETF is another investment vehicle that can potentially draw investors interest and deepen market liquidity.REIT ETFs,either passively or actively managing their REIT holdings,can he

120、lp investors broaden their investment portfolios by accessing overseas REITs,as well as diversifying their exposure at lower costs.Hong Kong,with only one REIT ETF,displays room for improvement.In view of this,the FSDC proposes:Hong Kong,with the first REIT ETF launched only recently in October 2020

121、,should consider devel-oping more REIT ETF products,particularly those investing in H-REITs.A deep and liquid REIT ETF market would also be in line with the Mainlands REITs ambitions,and when the conditions allow,can potentially pave the way for introducing innovative cross-boundary H-REIT/C-REIT hy

122、brid ETFs.REIT futures would be another example of REIT-related product innovation-in August 2020,the SGX launched Asias first international REITs futures based on indices tracking diverse REITs listed in Singapore,Hong Kong,Malaysia and Thailand14-another instrument that Hong Kong can explore in th

123、e future.Promoting H-REITs as a competitive structure for listing real estate assets in healthcare,logistics parks and infrastructure sectors.Given the fact that in the past,REITs underlying assets have been highly concentrated in more traditional sectors,and thus not much prior reference can be dra

124、wn for sponsors and intermediaries wishing to list other types of assets as REITs,the SFC should consider providing guidance and clarity on the regulatory implications for such listings,so that potential sponsors and intermediaries are provided clarity in this regard.Encouraging REIT-related product

125、 innovation.Internationally,different types of financial instruments have been explored and introduced to some leading markets as a means to provide liquidity and cater to different needs of trading.Singapore introduced the first REIT ETF to the Mainboard in 2016;currently,there are three REIT ETFs

126、listed on the SGX.In Japan,there are a total of 20 REIT ETFs traded in the Tokyo Stock Exchange(TSE)13.(i)(ii)Our Hong Kong Foundation,Land and Housing Policy Research Report,https:/ourhkfoundation.org.hk/sites/default/files/media/pdf/Brownfield2020_Full_ ENG.pdfJapan Exchange Group,ETFs listed on T

127、SE(updated as of Feb.8,2021),https:/www.jpx.co.jp/english/equities/products/etfs/issues/tvdivq000001j45s-att/b5b4pj000002nyru.pdfSingapore Exchange Media Centre,SGX pioneers Asias first international REIT futures,https:/ distribution requirements need to be satisfied for REITs to receive tax transpa

128、rency treatment,under which no tax will need to be paid at REIT level,whereas listed property companies will be subject to corporate income tax at the company level.Distributions of REITs out of taxable income are exempted for resident and non-resident individual investors,while taxed at 17%for resi

129、dent corporate investors.As for non-resident corporate investors,the applicable tax rate is 10%based on a tax concession expiring in December 2025.Upon the expiry of the tax concession arrangement,distributions to non-resident corporate investors may be subject to the prevailing corporate tax rate(c

130、urrently at 17%).Japan-Concessionary real property acquisition taxes at 0.6%to 1.6%are provided to REITs in Japan as compared to an ordinary property acquisition taxes at 3%to 4%payable by listed property companies when acquiring assets.(i)Tax treatment in Singapore and Japan As mentioned earlier,H-

131、REITs are treated as collective investment schemes constituted as unit trusts,and therefore can benefit from profits tax exemption.Combined with no tax on capital gain and dividend income,this puts Hong Kong in a strong position in terms of tax competitiveness.However,as pointed out by some market p

132、articipants,there remains room for improvement.At present,the tax exemption applies only to H-REITs themselves,and not to the property holding special purpose vehicles(SPVs),which are required to be set up if H-REITs are holding assets such as hotels,recreational parks or serviced apartments.Further

133、more,H-REITs are subject to property taxes on rental income received from Hong Kong properties,while the property holding SPVs will be generally exempted from property taxes.It is common for REITs to seek to expand their portfolios through asset acquisition.For Hong Kong REITs,which typically hold t

134、heir properties via SPVs,such transfers of properties normally take the form of sale and purchase of the shares of the SPVs,which are subject to stamp duty of 0.1%.However,in the case of a direct transfer of non-residential properties,the transfer will be subject to buyers stamp duty at up to 4.25%,

135、which is relatively higher than that of Singapore at up to 3%and that of Japan at up to 1.6%.(ii)Tax treatment in Hong Kong While costs would affect attractiveness of a listing venue for REITs and others,cross-boundary listing of REITs assets would also bring about additional tax implications.To cap

136、ture REITs potential arising from regional partners,treatment of dividend withholding tax in the home jurisdictions,such as the Mainland and other Southeast Asian countries,can be explored.Market participants also agree that listing and ongoing compliance costs of REITs are generally higher than tho

137、se of listed companies,largely due to regulatory and compliance requirements specific to REITs,such as the requirement of having a professional external trustee.Costs incurred at the REIT level would affect the distributable profits to investors and thus undermine its attractiveness to investors,whi

138、ch may partly explain why some major REITs markets provide specific tax incentives for REITs.4.Exploring Tax and Financial Incentives17As mentioned earlier,takeover and mergers are common ways for REITs to grow their businesses and,more active asset transactions contribute to the growth in the size

139、of REITs and hence their liquidity.However,as previously noted in the 2013 FSDC Research Paper,such restructurings of H-REITs suffer from two key regulatory difficulties:5.Implementing Regulatory Enhancements Expeditiously“Absence of“squeeze-out”provisions facilitating takeover of a REIT.Unlike list

140、ed companies,there is no mechanism in the REIT Code for the offeror to take out the recalcitrant minority unitholders,no matter how small they are,resulting in a complete takeover of H-REIT practically difficult.Non availability of“scheme of arrangement”in the privatisation of a REIT.Similarly,there

141、 is no equivalent provision for H-REITs to effect a scheme of arrangement,which is binding on all shareholders,including those who object to the scheme proposal,to the extent approved in meeting by shareholders and/or creditors(representing 75%present and voting in person or by proxy)and sanctioned

142、by court.”Another effective way to incentivise and attract new issuers and assets is through financial grants.The FSDC notes and welcomes the Governments announcement in the 2021-2022 Budget that subsidies will be provided for qualifying REITs authorised by the SFC and listed in Hong Kong in the com

143、ing three years,and will cover 70 per cent of the expenses paid to local professional service providers for the listing of REITs,subject to a cap of$8 million per REIT.The FSDC would encourage ongoing consideration of extension and further incentives to stimulate and harness the opportunities for Ho

144、ng Kong.The absence of tax advantages available for H-REITs makes it difficult for H-REITs to differentiate themselves from listed property companies with similar business nature from a tax perspective.As part of Hong Kongs overall strategy for REITs,a review of the existing tax policies with regard

145、 to REITs is warranted.Consideration should be given to the necessity of potentially providing tax incentives in areas including the following:Property tax on REITs;Profits tax on asset holding SPVs;Tax for transfer of properties acquired by REITs;andStamp duty on trading REITs.(a)(b)(c)(d)18Fortuna

146、tely,Hong Kong can build on its reputation as an international financial centre,to establish and expand its REITs market base.Particularly,as many of our neighbouring Asian economies and Belt and Road countries have been going through expedited urbanisation in recent years,tremendous infrastructure

147、financing needs may arise,presenting a potential growth driver for Hong Kong.With this,more emphasis should be given to regional and international promotion of H-REITs to establish Hong Kong as the regional go-to market.One way of doing so would be to dedicated REITs events,such as“REITs day”,which

148、would be helpful in bringing the concept of REITs closer to investors.In addition,REITs should be highlighted in the comprehensive product universe that Hong Kong has to offer in various overseas delegates and promotional efforts.(i)International PromotionWith a refreshed REITs value proposition,exp

149、anded investor base and product basket,Hong Kong can form a more coherent and comprehensive approach to promoting REITs.As one of the earlier Asian markets to have introduced REITs,Hong Kong presents competitive advantages to a spectrum of market participants,including REITs sponsors,managers and tr

150、ustees,as well as institutional and retail investors.A more targeted promotional approach would ensure the information they need is readily available for these target audience groups from the region and around the globe.6.Stepping up Market Promotion and Regulatory CommunicationListed company disclo

151、sure,https:/www1.hkexnews.hk/listedco/listconews/sehk/2020/0816/2020081600019.pdf15Making reference to the 2013 FSDC Research Paper,the FSDC would like to restate the proposal that legislative changes should be considered to facilitate compulsory acquisition and scheme of arrangement for H-REITs.Leg

152、islative amendments should be made to extend their application to listed collective investment schemes;the SFC should also consider issuing a Practice Note on their application to ensure minority unitholders of H-REITs are accorded the same level of protection as shareholders in listed companies.In

153、a nutshell,the same takeover/privatisation tools available to Hong Kong listed companies should also be available to H-REITs as they represent the same economic features and substance,and hence should be provided a level playing field.Despite the fact that,for various reasons,no solution has been pu

154、t forward since then,the FSDC gladly notes that the SFCs“Consultation Conclusions on Proposed Amendments to the Code on Real Estate Investment Trusts”issued in 2020 acknowledges such issues,and states that it would consult the Government for the way forward.Expeditious implementation of such regulat

155、ory enhancements would be welcomed by market participants.Relatedly,it is stated in the same Consultation Conclusions that a REIT may adopt a“stapled structure”with its units stapled with securities of another listed entity provided that similar governance and investor protection measures are in pla

156、ce and requirements in the REIT Code are complied with in substance.The stapled structure is commonly used by business trusts in Hong Kong.Recently,there has been a transaction15 which involves privitisation by way of a scheme of arrangement.It is suggested that the SFC should give a clear guidance

157、on the applicability of law-based privatisation for REITs adopting a stapled structure in the future.19While it is widely recognised that investor protection lies at the core of financial regulators mandates,and regulatory standards should not be compromised to achieve market development,certain ser

158、vice level commitments by relevant regulators would be highly appreciated by market players.The setup of the designated telephone hotline and enquiry email by the SFC in July 2020 is a timely example of such efforts.The dedicated desk,which is to answer REIT related comments and enquiries from marke

159、t participants and the public,is expected to be helpful in facilitating communications.Similar measure for expediting communications with market players and potentially shortening the processing time for application approvals-key consideration factors in choosing the listing venue will be welcomed b

160、y the market.18Additionally,continuous regulatory clarity for professional service providers,such as REITs sponsors and managers,would be highly helpful in allaying their concerns over compliance and operational matters and encourage more to consider utilising the H-REITs structure.For this,both Jap

161、an17 and Singapore19 have collated simplified booklets for existing and potential REITs sponsors and mangerss quick information.We note that“Hong Kong regulatory regime for REIT”,prepared the SFC,was published in July 2020 to facilitate understanding of the market.20(iii)Swift and Transparent Regula

162、tory CommunicationChina International Capital Corporation,Report on China Infrastructure REITs(中國基礎設施 REITs 系列研究總報告),December 2020IFEC,Real Estate Investment Trust,https:/www.ifec.org.hk/web/en/investment/investment-products/reit/index.pageTokyo Stock Exchange,J-REIT Guide Book,https:/www.jpx.co.jp/

163、english/equities/products/reits/guidebook/b5b4pj000003984r-att/REIT.pdfMonetary Authority of Singapore,Compliance Toolkit for Real Estate Investment Trust Managers,https:/www.mas.gov.sg/-/media/MAS/Regulations-and-Fi-nacial-Stability/Regulations-Guidance-and-Licensing/Securities-Futures-and-Fund-Man

164、agement/Guidance/Compliance-Toolkit/Compliance-Toolkit-for-REIT-Managers.pdf?la=en&hash=E76EAA73A48A76F54BE4DF785EFDAB38FC972373Securities and Futures Commission,Hong Kong regulatory regime for REITs(July 2020),https:/www.sfc.hk/-/media/files/PCIP/FAQ-PDFS/Presentation-Materials-on-Hong-Kong-regulat

165、ory-regime-for-REITs.pdf1617181920It would also be beneficial to explore more targeted marketing strategies for different types of investors to raise awareness of REITs and deepen their understanding of the unique characteristics of REITs.As mentioned previously,the expected sustaining low interest

166、environment has left some institutional investors searching for yield while minimising risk exposure.A risk return profile similar to REITs would present considerable appeal to these investors,in particular to those with relatively low risk appetites and longer investment horizons,such as pension fu

167、nds and insurance companies.In Hong Kongs future endeavours to engage with these investors,REITs should be highlighted among others in our product basket.On the other hand,reaching out to retail investors is equally important as they are active participants-holding 16%and 21%of the US and Singapore

168、REITs as of 201916,respectively,and contributing to market liquidity.Whilst educational materials for retail investors have been developed by relevant regulators and agencies,including the dedicated webpage on the Investor and Financial Education Council(“IFEC”)website17,more diversified channels an

169、d platforms with information in varied details can be further explored to deepen retail investors familiarisation with REITs.(ii)Targeted Marketing by Investor Type 20VI.ConclusionThe well-established financial infrastructure,sophisticated market participants and deep real estate market in Hong Kong

170、 lay a strong foundation for the further growth of REITs.More concerted efforts by the Government and regulators following the supportive measures announced in the 2020 Policy Address and 2021-2022 Budget and are highly anticipated by market participants and are believed to bring additional growth m

171、omentum.Our ability to capitalise on Hong Kongs unique competitiveness and to keep pace with the rapidly evolving global landscape is key to bringing prosperity to the REITs market.Some prominent trends not to be overlooked include the digital transformation of business models,the lasting impact of

172、COVID-19 on the investment environment and investor appetites,the steady urbanisation and corresponding infrastructure needs of emerging economies,and last but not least,the ever-closer connectivity with the Mainland market.The FSDC believes now is an ideal window to brush up our REITs capabilities

173、to stay relevant and competitive in an era of change.While this paper focuses mainly on REITs,it is noted that there have been a number of positive developments for investment funds and private equity funds,including tax treatments thereof.It is also noted that Hong Kong is home to a number of liste

174、d properties companies and property-management-companies.Accordingly,building an attractive capital market for real estate,including Mainland real estate,is important to Hong Kongs position in the international financial landscape,to which the FSDC believes a strong REITs market would bring much val

175、ue.The FSDC hopes that the recommendations set forth in this paper can help nurture an ecosystem for real estate financing with expanded market depth and enhanced liquidity.As always,the FSDC looks forward to working closely with various stakeholders to further develop the REITs market and cement Ho

176、ng Kongs position as an international financial centre.21Appendix.Cross-Market Comparison of REITs RegimesTrustYesSecurities and Futures CommissionREIT Code with reference to listing rules75%of gross asset value of real estate that generates recurrent rental income;Combined value of minority-owned p

177、roperties,property developments,financial instruments and other ancillary investments shall not exceed 25%of gross asset value Hong KongSingaporeMainland ChinaAustraliaJapanUnitedStatesLegal formMust beListedPrimary Regulatory AgencyRegulatory FrameworkDistribution requirementsTrustYesSecurities and

178、 Futures CommissionREIT Code with reference to listing rules90%+of audited net income after tax TrustNo,but listing is necessary to qualify for tax concessionsMonetary Authority of SingaporeSecurities and Futures Act and Code on Collective Investment Schemes90%+of taxable income to enjoy tax concess

179、ionsFund investing in asset-backed securitiesYesChina Securities Regulatory CommissionGuidelines on Public Offering of Infrastructure Securities Investment Fund90%+of audited distributable profits Trust or CompanyNoAustralian Securities and Investments CommissionManaged Investment Schemes under Corp

180、orations ActNo mandatory distribution requirement,but undistrib-uted earnings may be taxed at the highest marginal tax rate at 49%.To mitigate this,it is standard practice to distribute 100%of the taxable income of the REITs.Trust or Corporation NoTokyo Stock ExchangeAct on Investment Trusts and Inv

181、estment Corporations and SecuritiesListing Regulations90%+of distributable profits Trust or CorporationNoSecurities and ExchangeCommissionSecurities Exchange Act90%+of taxable income Regulatory regime22Hong KongSingaporeAustraliaJapanUnitedStatesRestriction on foreign assetsRestriction on investment

182、sNo75%of gross asset value of real estate that generates recurrent rental income;Combined value of minority-owned properties,property developments,financial instruments and other ancillary investments shall not exceed 25%of gross asset value NoProhibited from investing in vacant land or mortgages;10

183、%-of deposited property can be invested in property development and uncompleted propertyYesOnly allowed to hold 80%+in infrastructure projects that generate stable income with 3+years of operationsNoNot allowed to carry out trading business,such as developing land for sale,otherwise the flow through

184、 treatment will not be received NoNot allowed to engage in activities other than asset managementNo75%+of profits from real estate-re-lated income;75%+of assets from real estate assets,cash items and government securitiesMainland ChinaRegulatory regime(continued)23Hong KongSingaporeAustraliaJapanUni

185、tedStatesIncome taxTax oncapital gainand dividend incomeTransactiontax at acquisition of propertiesAuthorised REITs are exempted from profits tax,while the SPVs through which investments are made are subject to profits tax.No tax on capital gain and dividend incomeTransfers of properties in the form

186、 of sale and purchase of the shares of the asset holding SPVs are subject to stamp duty of 0.1%.Stamp duty of up to 4.25%on direct transfer of non-residential propertiesREITs can enjoy tax transparency treatment so that no tax will be levied on REITs level.No tax on capital gain and dividend incomeS

187、tamp duty of up to 3%on transfer of non-residential propertiesIncome taxes are passed through to the investors.Capital gain taxes are passed through to the investors.Stamp duties apply,depending on the location,character and scale of landsIncome will be subject to corporate tax;howeverdistributions

188、paid to investors are deductible for corporate income tax.Capital gain will be subject to corporate tax;howeverdistributions paid to investors are deductible for corporate income tax.0.6%to 1.6%of concessionary acquisition tax Corporate level taxes apply on taxable income that is not distributed and

189、 deduction is allowed for dividend paid to shareholders.Capital gain and dividend income are subject to corporate income tax.Real property acquisition tax and registration tax apply depending on the location of propertiesAs at the completion of this report,listing of the first Mainland infrastructiu

190、re REIT is under preparation.Designated tax policies in relation to Mainland infrastructure REITs have not been available.21Tax treatment(at REIT level)2124Source:European Public Real Estate Association(EPRA),Monetary Authority of Singapore,China Securities Regulatory Commission,Australian Securitie

191、s and Investments Commission,Tokyo Stock Exchange,US Securities and Exchange CommissionHong KongSingaporeAustraliaJapanUnitedStatesTax on distribution to domestic investorsTax on distribution to foreign investorsTax on transferring REITsIncome tax ratesNo further tax to payNo withholding taxStamp du

192、ty of 0.2%16.5%Taxable at prevailing income tax rate at 17%for corporate,while exempted for individuals 10%withholding tax on foreign corporate;(The 10%tax rate is under a tax concession arrangement expiring in December 2025)exempted for non-resident individualsNo stamp duty 17%Taxable at investors

193、prevailing tax rate according to the income characters30%withholding tax in general;15%withholding tax applies on qualified Managed Investment Trusts;and 10%withholding tax applies on certain newly constructed“green buildings”Capital gain tax at investors prevailing tax rates30%Withholding tax of 20

194、%to individual and 15%to corporate investors(including surtax),which can be credited against inves-tors final tax payable Withholding tax of 20%to individual and 15%to corporate investors(including surtax)Capital gain tax at 20%(including surtax)23.2%Taxable at prevailing income tax rate at up to 37

195、%for individuals and 21%for corporate30%withhold-ing tax on general dividend and 35%withholding tax on capital gain dividend15%withholding tax on proceeds if REITs are not US-controlled 21%Tax treatment(at investor level)25The FSDC was established in 2013 by the Hong Kong Special Administrative Regi

196、on Government as a high-level,cross-sectoral advisory body to engage the industry in formulating proposals to promote the further development of the financial services industry of Hong Kong and to map out the strategic direction for the development.The FSDC has been incorporated as a company limited

197、 by guarantee with effect from September 2018 to allow it to better discharge its functions through research,market promotion and human capital development with more flexibility.Contact usEmail:enquiryfsdc.org.hkTel:(852)2493 1313 Website:www.fsdc.org.hkAbout the FSDCAcknowledgementThe FSDC would like to thank the following experts and professionals for their valuable input:Ms Ding Chen Mr Andrew Weir Mr Barry Chan Dr Terence Chan Mr Hayden Flinn Mr Guo Jin Mr Jeremy Ong Mr Gordon Tang Ms Ada Wong Mr Conrad Yan