Finance and insurance
We provide high impact advice to institutions operating in the finance and insurance sectors, including insurance and reinsurance companies, insurance agents and brokers, financial service intermediaries, investment banking firms, fund managers and hedge funds. Our lawyers have significant experience representing clients on a broad range of transactional and regulatory compliance issues. We advise across several practice areas, including M&A, capital markets, corporate finance, funds and financial services. Charltons provides an insightful and highly personalised service, supporting our finance and insurance clients on complex issues by providing them with high impact, smart and practical advice.
Hong Kong as the world’s financial centre
Hong Kong is regarded as the gateway for overseas enterprises seeking access to the Mainland China market, and for Mainland China enterprises going international due to its free flow of information and capital, advanced financial infrastructure and effective regulatory regime. The business-friendly environment, low taxation and developed legal system of Hong Kong contribute to Hong Kong’s success as a major asset management, capital formation, banking and insurance hub. According to the Financial Development Report released in 2012, Hong Kong ranked first in the World Economic Forum, surpassing the United States and the United Kingdom.
The financial service industry is one of the four pillar industries of Hong Kong. According to the statistics of the Hong Kong government, 230,000 people (approximately 6% of Hong Kong’s entire workforce) were employed in the financial service industry in 2013. Further, Hong Kong is one of the largest banking centres in the world: 70 of the top 100 banks in the world have established a presence in Hong Kong.
Hong Kong’s Role as an Offshore Renminbi (RMB) Centre
Hong Kong has developed into the most comprehensive and competitive platform for offshore RMB business and has become the global hub for RMB trade settlement for local as well as overseas banks and companies. RMB trade settlement handled by banks in Hong Kong in 2013 totaled more than RMB3.8 trillion. Hong Kong also has the largest pool of offshore RMB liquidity. In 2013, the amount of RMB deposits and outstanding RMB certificates of deposits exceeded RMB1 trillion, representing 70% of the offshore pool of RMB liquidity. Hong Kong has a large offshore RMB business.
A wide range of RMB financial assets is available in Hong Kong for local and international investors. In addition to dim-sum bonds, investors can also invest in a variety of investment funds, commodity-linked products, exchange-traded funds, REITs, and insurance policies. As at 31 December 2013, the outstanding amount of listed RMB funds and unlisted RMB funds in Hong Kong amounted to RMB37 billion and RMB24 billion respectively.
Moreover, since the launch of the Shanghai-Hong Kong Stock Connect scheme in November 2014, a new channel for the cross-border use and circulation of RMB was created where Mainland China investors can invest in shares listed on the Hong Kong Stock Exchange, and local and international investors are able to invest in shares listed on the Shanghai Stock Exchange directly.
Despite the fact that the liberalisation of the economy of Mainland China and the internationalisation of the RMB has brought many growth opportunities for Hong Kong, Hong Kong also faces various challenges and uncertainties. The gap between Hong Kong and Mainland China financial centres will continue to narrow as the infrastructure and governance in the Mainland China market is continuously strengthened and improving. The Shanghai Free Trade Zone which was established in August 2013 is one of the examples showing the determination of the Mainland China to liberalise its market.
Further, China has begun exporting offshore RMB business to other financial centres such as Singapore and London, all jostling for a slice of the business. In 2013, Singapore and London accounted for around 7% and 6% of all offshore renminbi-denominated currency payments respectively.