The Hong Kong Securities and Futures Commission (SFC) has developed risk management tools to hedge the risk of mainland assets, with the aim of strengthening its role as a centre for hedge funds. Hong Kong is the largest hedge fund centre in the Asia-Pacific region, where alternative assets grow at the fastest pace in the world. A survey conducted by SFC last year of licensed hedge fund managers showed that from 2018 to 2020, the total assets managed by hedge funds surged by 48% to USD287bn. SFC deputy chief executive Julia Leung Fung-yee said the new hedging tools such as Stock Connect and Bond Connect will encourage long-term investments in Hong Kong as they provide global investors with an additional liquidity pool for managing their risk exposure to the mainland markets.
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