The Financial Secretary of Hong Kong announced his budget proposals on 25 February 2015  “Competitiveness” was the stated theme and it included proposals to bolster Hong Kong as an international hub and promote certain industries.  In relation to the financial services industry the following was announced:

Consensus has been reached between the Securities and Futures Commission and the relevant mainland authorities on the mutual recognition of funds.  On implementation, this will further promote diversification of fund products in the Mainland and Hong Kong.

Legislation to be introduced as soon as possible to allow offshore private equity funds a Hong Kong tax exemption (similar to existing legislation relied on by offshore hedge funds managed in and from Hong Kong).

Public consultation in March 2015 on legislation to provide for open ended fund company structures.

Waiver of stamp duty to be extended to ETFs that track indices comprising of more than 40 percent of Hong Kong stocks.  (A waiver currently exists for those tracking indices with not more than 40 percent Hong Kong stocks).

Financial Services and Treasury Bureau to establish a task force with the Hong Kong Monetary Authority (HKMA) to review requirements under the Inland Revenue Ordinance for interest deduction in taxation of corporate treasury activities.

Intention to issue another inflation-linked retail bond of up to $10 billion with maturity of three years.  The issue will be targeted at Hong Kong residents.  Details to be announced by the HKMA in due course.