developed the liquidity, infrastructure and ecosystem that are capable of serving the financing, investment and risk management needs of corporates and investors alike. there are many factors behind the success of hong kong as a china gateway and an offshore rmb hub. our " one country, two systems " institutional arrangement is critical : it facilitates cross - boundary cooperation between mainland and hong kong authorities, while allowing hong kong to maintain a market environment that is familiar to market participants from the rest of the world. 2 / 5 bis - central bankers'speeches the design of these products and service offerings are also conducive to international participation. investors using these connect schemes can continue to follow common offshore market practices and rules that they are accustomed to, and leveraging their established legal and operational set - ups in hong kong, without the need to open onshore accounts and engage onshore agents. all these are familiar factors. i would, however, argue that hong kong's robust regulatory regime has played a crucial, if understated role. for our fellow mainland regulators, the various connect schemes in effect allow investors that are not directly under their purview to access the mainland market. mainland authorities would need to have confidence that such investors are properly regulated in hong kong. consider how much emphasis that mainland authorities put in market stability and order, the trust that they have in hong kong's regime is remarkable. likewise for international investors : the fact that they are now investing in a market – the mainland market – without actually having connected to that market shows how much they trust that hong kong regulators have done their homework for them, and that we will make sure that their interest is well - protected and the investment channel will run in an orderly manner. our robust regulation is what underpins this trust and in turn, our success as the hub for all things china. ( ii ) tech and innovation tech and innovation is another area that i believe regulation and market development are complementary and can feed into each other in a virtuous cycle. this is particularly the case for virtual assets. there was a time when virtual assets and the so - called cryptocurrencies were seen as a way to escape from the reach of governments and regulation. some continue to hold this belief, but they are now a minority. two reasons explain this. first is some high profile failures in the industry. many of the causes behind the failures - poor governance, misuse of client assets, etc. – are not new and are exactly the

hksar government is well - positioned to fill the gap by providing high - quality sukuk to meet the strong demand from investors. the global roadshows of the government sukuk will also provide an ideal opportunity for us to reach out to global investors and showcase our credit strengths and islamic finance capability. 16. as the government ’ s representative under the government bond programme, the hkma is now working closely with the government to prepare for the inaugural issuance of government sukuk. a detailed issuance plan is being devised with reference to international practices and market conditions. according to our current plan, the inaugural government sukuk would be based on the ijarah structure and target institutional investors globally. what ’ s in it for fund raisers to issue sukuk? 17. as i have mentioned earlier, the key objective of the government sukuk is to play a catalytic role, paving the way for local and international fund - raisers, no matter from the public or private sector, to follow suit. 18. for the potential sukuk issuers sitting here today, you may wonder what benefits you will get by issuing sukuk. well, let me highlight two key benefits here. 19. first, you would be able to broaden your investor base. by issuing conventional bonds, you will only be able to tap conventional investors. but by issuing sukuk, you will be able to get both conventional and islamic investors to participate. in particular, issuing sukuk will help you to gain access to the large pool of liquidity in the middle east and other islamic countries, where investors are progressively looking for shariah - compliant assets in this part of the world. at the same time, more and more conventional investors are also looking to diversify their portfolios into sukuk as a new asset class. so, issuing sukuk would enable fund - raisers to enjoy a wider and more diverse investor base. 20. second, you would be able to diversify your funding sources. with the additional option of sukuk in your arsenal, you can choose to issue either conventional bonds or sukuk, depending on the pricing and liquidity in the market at the time of issuance. this would provide more flexibility and a more stable source of funding to fund - raisers, particularly at a time when the funding cost of sukuk is more attractive than that of conventional bonds or when there is difficulty in obtaining liquidity in