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

uncertainties for the transition, all banks and corporations should keep updated of the latest development and understand what aspects of their business would be affected – this is a fundamental first step. undertaking detailed risk assessment and formulating an action plan would be next. for now, some banks may hesitate to trade in products using the new alternative reference rates, as they want to see better market liquidity before they start. but this is a ‘ chicken and egg ’ scenario – if everyone plays a waiting game, the market will never be developed. more importantly, going into the market in a manageable scale would enable your people to learn the rope early before these trades become more main stream. client education is also important 10. while banks are gearing up their own preparation, the wide - spectrum of ibor users is adding further complexity to the transition process. switching to alternative reference rates is not something that can be done unilaterally. banks need to work closely with their counterparties to develop the necessary fall - back arrangements. 11. it may be relatively easy to discuss the transition plans with counterparties that are also financial institutions, as everyone is more or less on the same page. but ibors are also used by banks ’ different clients, both corporations and individuals. there is a big gap among these ibor users on the awareness of the benchmark reform, so the situation becomes less straightforward. 12. therefore, client education is another vital task. banks should begin outreach to their clients, and educate them about the benchmark transition early. this could help to minimise misunderstanding and costly litigation in the future. raising market awareness in hong kong 13. closer to home in hong kong, the treasury markets association ( tma ) has been working with bank representatives on benchmark reform for many years. more recently it has intensified its reach - out to other sectors. it has set up a working group to engage a wider spectrum of stakeholders including accountants, lawyers, bank customers and industry 2 / 4 bis central bankers'speeches associations like isda. it is important that different market participants understand what the transition will mean for their business operations and how they should prepare for these changes. the working group is now looking at issues like the implications on accounting and the transition of cash products. it will further engage stakeholders to explore means of encouraging the adoption of alternative reference rates in their day - to - day transactions and business activities. 14. at the same time, the hkma supervisors has also been actively engaging banks. in