bonds are lodged. the construction of the system linkage between the onshore infrastructure institutions is under way. upon completion, the hkma ’ s central moneymarkets unit will explore with the mainland side on the system enhancements required for bond connect investors to participate in the exchange bond market. 16. this development moves closer to having a single access point to the onshore bond market and will further open up access to the fast - growing credit bond market which remains relatively untapped by international investors. this presents an opportunity for investors to look further along the credit curve for diversification and yield. relatedly, the entry of foreign firms into the onshore credit rating business is expected to facilitate this process, speed up the convergence of local and global ratings standards, and enhance foreign investors ’ analysis of corporate credit. 17. secondly, mainland and hong kong stock exchanges have reached an agreement to include eligible etfs in the stock connect scheme and technical preparations are under way. this will give global investors direct and efficient access to the rapidly developing onshore etf market, enrich the product range under stock connect and facilitate the healthy development of the etf markets on both sides. 18. thirdly, as mainland bonds play an increasingly strategic and long - term role in investors ’ portfolios, the demand for hedging tools is also growing. our priority in the next stage of enhancements to northbound trading under bond connect is the inclusion of risk management tools. we are discussing with our mainland counterparts to facilitate access to various risk management products such as interest rate swaps to meet global investors ’ hedging needs for their bond investment in the mainland. 19. over the years, hong kong has played a central role in intermediating the financial flows between the mainland and the rest of the world. the development of onshore capital markets presents huge opportunities for hong kong ’ s financial sector. 20. at the hkma, we have been continuously working with mainland authorities and relevant parties to explore new initiatives and introduce market - oriented enhancements to our various connect schemes, with a view to improving foreign investors ’ access to onshore markets and smoothening the investment experience. 21. we warmly welcome views and suggestions from the industry on ways to leverage the unique attributes of hong kong to better serve global investors, support the development of onshore markets and advance the internationalisation of the rmb. 22. thank you. i wish today ’ s conference a great success.

we might helpfully serve some catalytic function. let me mention just two areas of special attention in hong kong at present - without denying that there may be others too. the first concerns the stock and futures exchanges, where there is a major agenda for change. notable components of this agenda are the 30 - point programme announced last september for strengthening discipline and transparency in the markets - most of which have now been implemented - and the proposals announced by the financial secretary in march to reform and unify the ownership structures of the stock and futures exchanges and their clearing houses. a tight timetable has been set and progress should be visible later this year. the second concerns the development of the hong kong dollar debt market. this market has progressed considerably in recent years, with the evolution of the markets for exchange fund bills and notes, borrowing programmes by public sector bodies, fundraising by multinational agencies and sizeable funding programmes - mainly at the short end - by hong kong financial institutions. but, except for exchange fund bills, the secondary markets are not greatly active and there has been little activity by local private sector corporate entities to raise longer - term funds directly from the debt market. perhaps the difficulty is simply that market conditions are seldom regarded as propitious on all fronts simultaneously - at present, for instance, the general level of interest rates may tend to discourage issuance at term. and there is definitely a chicken - and - egg problem in that prospective investors would like prior evidence of a liquid market, but liquidity cannot be tested until there has been issuance. dilemmas such as these are certainly not unique to hong kong. i acknowledge also that there are perceived obstacles concerning the tax regime, but it is worth noting that hong kong does have a low overall tax environment. it is hard to find solutions which fully satisfy all parties in such matters. it is also worth noting that, in normal market conditions, there is perhaps less incentive to exploit the potential of the local currency debt market than there might be in other centres, because of our pegged exchange rate : some borrowers may consider the us dollar market a satisfactory surrogate, especially given its established liquidity. in that sense we may be a victim of our own success on the exchange rate front, although i would not wish to place too much weight on this point - it may be a viable alternative only for a minority. however, if funding needs can be properly satisfied via alternative routes, we ought perhaps to rest content. our role at the hong kong monetary authority is