the future. the business and financing environments for the enterprises could easily come under stress and the sme financing guarantee scheme will then play an important role to help banks maintain a steady and sustainable flow of financing to the smes. to promote the launch of this new scheme, the hkmc will offer a special discount for applications filed on or before 30 june 2011. there will be a waiver of three months ’ guarantee fee for loans with tenor of one to three years and a waiver of six months ’ guarantee fee for loans with tenor of more than three years. lastly, let me thank once again the senior representatives of the 21 banks for participating in today ’ s signing ceremony. we stand ready to work with the banking industry to jointly promote this project which is so meaningful for the smes and the local economy. thank you!

. because of hong kong ’ s role as an international financial centre, and the fact that our own currency is linked to the us dollar, there is extensive holding of us dollars and a considerable trade in us dollar - denominated assets. the existing market demand within hong kong for a us dollar clearing system is a persuasive enough argument for its introduction : the potential demand for such a system, and the strategic impetus that it would give to our development as a leading financial centre, is considerable. in the near term, hong kong ’ s us dollar clearing system will provide the necessary infrastructure to support the stock exchange ’ s launch of the growth enterprise market ( gem ), which will allow listed shares to be denominated and settled in us dollars. in the longer term, the system will provide a range of opportunities for further developing our stock and debt markets into major world markets. a local us dollar clearing system will bring with it the advantages of speed, convenience and efficiency : it will, for example, allow us dollar cheques to be settled within two days, instead of the current two weeks. in addition to these obvious advantages, it will also carry the benefit of safety, in the form of reduced settlement risk. by enabling, within hong kong, delivery versus payment ( dvp ) for us dollar - denominated securities, and payment versus payment ( pvp ) for foreign exchange transactions between us dollars and hong kong dollars, the system will eliminate the settlement risk that arises when a transaction is spread across different time zones. greater safety at the level of individual transactions will be complemented by the contribution the system will make to monetary stability. by reducing the need for using the hong kong dollar as a vehicle currency for conducting non - domestic financial business, the us dollar clearing system will reduce the impact on local monetary conditions of movements in portfolio capital unrelated to economic developments intrinsic to hong kong. this is an excellent illustration of how a piece of robust and efficient financial infrastructure can be conducive to other important policy objectives, in this case monetary stability. let me turn now to the mechanics of the system. the arrangement adopted here is a private sector solution, in which the settlement institution is a commercial bank. this is not only consistent with the tradition in hong kong, but is also in line with international practice and with the recommendations of the bank for international settlements. at the end of a rigorous selection process, a selection panel made up of disinterested members of the exchange fund