norman t l chan : how can hong kong consolidate its position as asia ’ s premier wealth and asset management hub welcoming remarks and keynote speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the treasury markets summit 2013, hong kong, 6 september 2013. * * * good morning, ladies and gentlemen, 1. it is very nice of the treasury markets association ( tma ) to invite me to speak at this year ’ s summit. it should not come as a surprise to you if i choose to talk about the “ soft powers of hong kong ” again today. i have no doubt that financial centres aspiring to win the privileged position of ifc ( international financial centre ) all have very good hard infrastructure, such as airport, roads, telecommunications, it etc. but what really differentiates a winner from the rest is its clear edge in the “ financial market infrastructure ” or the “ soft powers ”. today i would like to talk about two key building blocks in the arena of “ soft powers ” competition : “ platform building ” and “ reaching out ”. tribute to tma 2. the aim of “ platform building ” is quite simple. an ifc must ensure that it has the appropriate legal, regulatory, tax and policy framework for the financial services to develop and prosper. competition is not just about how good you are or have been, but more about whether you are better than your competitors or not. so it is no good for hong kong to sit on its laurels and just hope or pray that other financial centres do not or cannot catch up. 3. the main reason why i decided to set up the tma back in 2005 was precisely the desire to enhance the “ soft powers ” of hong kong ’ s financial services industry. as many founding members of the tma who are here today may recall, the predecessor of the tma was the acihk, the hong kong branch of the international aci headquartered in paris. the acihk played a useful role in supporting the treasury markets in hong kong, but there were limitations on its remit and resources. i can still remember vividly how i worked with the founding members ( some of them are here today ), such as horace fan, andrew fung, benny luk and peter pao to transform the acihk into the tma as we now know. i would like to take this opportunity to thank all the founding members for their efforts and contributions to help bring this important

not confined to the financial services sector. what i propose to do now is to highlight a couple of key “ soft ” infrastructure that is uniquely important to hong kong ’ s future development as the wealth and asset management hub in asia : ( a ) as we all know, the existence of an inheritance tax or estate duty, even at low rates, is a material impediment to the development of wealth and asset management businesses. back in 1998, the hkma started to lobby the hksar government to abolish the estate duty in hong kong in order to foster hong kong ’ s development as a wealth management centre. the lobbying efforts met with considerable resistance initially but we did not give up and continued with such efforts under the terms of three successive financial secretaries. in 2005, after seven years of relentless appeals, we finally convinced the financial secretary to include the abolition of estate duty proposal in his budget speech. this was followed by the legislative council ’ s passage of the bill implementing the abolition from february 2006 ; ( b ) modernisation of the trust laws : the amendment bill seeking to modernise hong kong ’ s trust laws was passed by the legislative council on 17 july 2013. this was an important milestone to revamp hong kong ’ s antiquated trust regime which had not been substantially reviewed and modified for decades. this is again something that the hkma had advocated and pushed strongly within the government in the past few years so that our trust law regime can catch up with the other financial centres ; ( c ) promotion of islamic finance : the legislative amendments to provide a comparable taxation framework for common types of sukuk vis - a - vis conventional bonds were passed by the legislative council on 10 july 2013. it was a key policy proposal made in the study jointly led by the hkma and the tma in late 2007, following the announcement in the 2007 policy address of the initiative to develop an islamic financial platform in hong kong. last week, hkma also announced jointly with bank negara malaysia ( bnm ) the establishment of a private - sector led joint forum for advancing the development of islamic finance in hong kong, and we are glad to have assistant governor bakarudin ishak of the bnm attending the panel discussion of the summit this afternoon ; ( d ) open - ended investment company ( oeic ) : the hkma has intensively lobbied for a legislative framework and regulatory regime for oeic in hong kong. we were very encouraged that this initiative was announced by the