environment for the pe and vc industry. hong kong now offers diversified fund structures through the introduction of the open - ended fund company ( ofc ) regime and a modernised limited partnership fund ( lpf ) regime, both providing also a redomiciliation mechanism. these two regimes have gained traction since their introduction. so far, more than 1000 ofcs and lpfs have been established in hong kong. on the taxation front, hong kong has an extensive network of comprehensive avoidance of double taxation agreements, or dtas, that cover major economies in asia including mainland china, japan, india, indonesia, as well as many major markets in europe, north america and the middle east. our dtas offer very favourable terms, in that they offer lower dividend and interest withholding rates. we are working hard to further expand the dta network. locally, we are exploring the scope for further enhancements to the carried interest tax concessions arrangement, based on the implementation experience so far. we are also reviewing the tax exemption regime for funds to identify possible areas of enhancement to better support the development of the fund industry. meanwhile, the hkma's exchange fund investment office is rendering tangible support for managers based in hong kong. it has already established alternative asset portfolios with dedicated allocation to smaller local hedge fund managers. the next step 3 / 5 bis - central bankers'speeches is to set up a dedicated allocation to smaller pe funds managed by local managers and those seeking to expand their hong kong operations. another exciting development is the establishment of the hong kong investment corporation ( hkic ). hkic consolidates the various public investment pockets introduced by the government in recent years, including investments in the greater bay area, strategic technology, portfolios with hong kong nexus, as well as the newly established co - investment fund. hkic has commenced operation recently and is identifying quality partners to make strategic investments. the hong kong government is also taking a proactive approach to provide further impetus to the long - term, balanced growth of the local economy and to make the city more liveable and sustainable. top priority is talent. hong kong currently hosts five of the global top hundred universities. but we want to attract more talent to deepen the bench. in less than a year, the various talent entry schemes have already granted permission to over 110, 000 talents from all around the world, and we continue to see a strong pipeline. looking for new growth areas is also important. in the years ahead, hong kong will leverage

with its other functions in consumer protection and financial stability, especially as the new and innovative services grow in scale or become widely adopted. cross - border coordination is also required to address potential arbitrage across jurisdictions, given the much wider reach of fintech products and services. derivatives markets, on the other hand, have a much longer history. the regulatory framework should therefore be informed by history, and lessons from the global financial crisis must not be forgotten. regulators need to guard against the problems that plagued derivatives markets before the crisis : namely, the overuse of leverage, excessive interconnectedness, and opacity. i don ’ t need to “ preach to the choir ” on the tremendous efforts exerted by regulators and market participants internationally to solve these problems. but i do want to remind ourselves to stay vigilant and ensure that implementation is seen through, as this work has not yet been completed. for example, initial margin requirements on non - cleared derivatives, which guard against the overuse of embedded leverage in derivatives, are still being phased - in in a number of jurisdictions including hong kong. at the same time, while derivative transactions that are intended to be cleared has increased five - fold in the past four years in hong kong, according to data from our trade repository, there is more room for further standardisation. finally, solutions such as deference mechanisms, which helps eliminate cross - jurisdictional regulatory arbitrage, are still works - in - progress between the hkma and our overseas counterparts. as we embark on further deepening of the derivatives markets in the asian region, the high standards set up by regulators and by the industry over the past ten years should be well respected, and strengthened regulations on margins, clearing, and transparency should be taken seriously as safeguards against potential risks. let me close by saying a few words about our host today. isda has been instrumental in promoting standardisation of documentation and practices in derivatives markets. in the process, it has played a key role in navigating the industry through post - crisis reforms. isda is and will continue to be an important platform for consensus building and knowledge sharing. i ’ m certain that isda will remain a valuable partner for everyone in asia as we continue to overcome the challenges i discussed today. i look forward to more fruitful collaboration going forward. 4 / 4 bis central bankers'speeches