. at the same time, hong kong can also provide an ideal platform for issuers from the mainland and other parts of asia to issue islamic financial instruments for satisfying their funding needs. bringing islamic capital markets to the mainstream 11. addressing one of the key issues to be discussed today, hong kong ’ s involvement in islamic finance will also help to bring islamic capital markets to the mainstream in two ways : provide a level playing field and encourage market participation in islamic finance. 12. to bring islamic financial products to the mainstream, a key task would be to level the playing field with their conventional counterparts. on this front, a study conducted by the hong kong government in conjunction with tma earlier concluded that there are no major legal or regulatory obstacles to transactions involving wholesale islamic financial instruments in hong kong. 13. however, there is a need to refine the tax regime in hong kong in order to provide a level playing field between sukuk and conventional bonds. owing to shariah requirements, structuring sukuk often involves the originator setting up a special purpose vehicle for the purposes of issuing sukuk to sukuk holders, and multiple transfers of underlying assets between the originator and the sukuk issuer in order to generate profits. these complex structures, which are not required for conventional bonds, may incur additional tax and stamp duty expenses for the sukuk issuers. 14. i am pleased to see that an amendment bill to address this issue has been introduced into hong kong ’ s legislative council and is now in the final stages of enactment. source : institute for international finance. bis central bankers ’ speeches the bill, once passed, will enable sukuk to enjoy tax treatments similar to those currently afforded to conventional bonds. this would be a significant milestone in the development of a sukuk market in hong kong. 15. apart from providing a level playing field, equally important is the active participation of market players, including non - islamic arrangers, issuers and investors in the islamic capital markets, as they will be the ones who lead market development in the future. hong kong is fortunate to have a strong presence of international financial intermediaries who can leverage on their global network of expertise to develop and structure a variety of shariahcompliant products here. 16. it is also crucial for fund raisers and investors to be aware of the benefits of islamic capital market instruments and understand their structures and operations. so, we have been working very closely with

norman t l chan : focus in hong kong on treating customers fairly speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the treat customers fairly charter launching ceremony, hong kong, 28 october 2013. * * * welcome to the treat customers fairly charter launching ceremony. i am pleased that representatives from 22 retail banks in hong kong gathered here today to sign the charter, pledging to implement the five high - level principles set out therein. 2. a customer - based, customer - oriented corporate culture is what we always applaud and hope for. this is true regardless of industry. however, not every industry or company is able to achieve this, particularly when they are under the pressure of increasing market competition and the need for profit - maximisation, it is not uncommon for some companies to adopt sales and marketing practices that may undermine consumers ’ interests. it has therefore led to the development of different consumer protection mechanisms in modern societies to address such issues, for instance, hong kong has established the consumer council in this context. nevertheless, the international community is increasingly concerned about the interests of financial consumers in recent years. in late 2011, the organisation for economic co - operation and development ( oecd ) has announced a set of high - level principles for protection of financial consumers. it is now in the process of developing effective approaches for implementing the principles with a view to promoting the principles to g20 members. 3. benchmarking against the oecd principles and the practices of some advanced economies, the hkma is of the view that hong kong has been doing quite well in protecting bank customers ’ interests. we also strive to make changes and improvements from time to time. yet, i believe there is a need and room for further improvements as to how banks deal with their customers. this is because bank customers are essentially entrusting most of their liquid assets or funds with banks that they trust. trust between banks and their customers is beyond that between general service providers and their customers. also, as compared to other financial institutions, it is indeed easier for banks to earn confidence and trust of their customers. in addition to bringing business opportunities and profit to banks, customers ’ confidence and trust in banks are also the cornerstone for banking and financial stability. 4. let me borrow a famous quote and put it simply that with “ great trust ” comes great responsibility. first, banks should ensure their prudential operation and risk management are in place to safeguard customer deposits. second