The Zhitong Finance App learned that on November 11, the Secretary for Financial Services and the Treasury of Hong Kong, Hui Ching-yu, said in writing in response to Member Li Weihong's question at the Legislative Council meeting that the Hong Kong Gold Central Clearing and Settlement System (CCS) began trial operation in July this year under the supervision of Hong Kong Precious Metals Central Clearing Systems Co., Ltd., with 11 banks as temporary direct participants to provide the market with efficient and reliable OTC international standard gold transaction clearing and settlement services. The market response was positive during the trial operation.
The Chief Executive's 2026 Policy Address has announced that the system will be officially launched in the first quarter of 2027. The settlement system will be connected to the instant payment settlement system before it is officially launched to achieve “bank payment” settlement. Relying on Hong Kong's world-class capital clearing and settlement capabilities, the settlement system will achieve a seamless connection between gold transactions and physical settlement. The Government is also exploring cooperation with the London Bullion Market Association to implement qualified delivery standards to integrate internationally recognized standards into Hong Kong's gold market infrastructure.
In response to a lawmaker's question about whether the Hong Kong Stock Exchange's development experience would be used to strengthen participation and support in the Hong Kong Gold Exchange's modernization process, Hui Ching-yu said that the Hong Kong Gold Exchange was formerly a private gold and silver trading market established in 1910, then restructured through a corporate structure and changed to its current name in 2025. The exchange operates in an industry self-regulatory model, and members are required to abide by the relevant rules. The Government has always maintained communication and contacts with the Hong Kong Financial Services Institute on internal management and member control measures, and provided appropriate liaison support during the restructuring of its corporate structure.
Furthermore, the “Policy Address” suggests that the government will push the industry to establish a gold industry association. The Financial Services and the Treasury Bureau is assisting the preparatory team in in-depth discussions on details such as the composition, membership and financial arrangements of trade associations. Industry associations will be able to gather opinions from relevant stakeholders, including Hong Kong Financial Services, to promote collaboration throughout the gold trading ecosystem.
Regarding the proposal to expand the types of assets permitted to invest in the “New Capital Investor Entry Program” to add physical gold, Xu Zhengyu said that the government has submitted revised regulations to the Legislative Council to optimize the preferential tax system for funds and single family offices, including expanding the scope of eligible investment coverage to include precious metals. The Government expects to resume debate on the second reading of the bill within this year. If passed by the Legislative Council, the relevant amendments will apply to 2025/26 and subsequent tax years.
As for the “New Plan”, the Government has successively optimized the scope of permitted investment assets (including relaxation of real estate investment requirements) and application arrangements in 2024 and 2025. The Government will continue to review the operation of the “New Plan”, including the arrangement of permitted investment assets, and evaluate its effectiveness in due course.
Regarding the latest developments in the HKMA's research on moderately increasing the gold holdings of the Exchange Fund and participating in the Hong Kong spot and futures market, Hui Ching-yu said that the “Policy Address” suggests that the HKMA is studying a moderate increase in the Exchange Fund's gold holdings and participation in the Hong Kong spot and futures market, and gradually transferring the existing gold inventory to the designated warehouses of the Hong Kong Gold Clearing Company. The HKMA is actively implementing a moderate increase in gold holdings through the Exchange Fund and participation in the Hong Kong spot and futures market. In addition to risk diversification, related work can also help promote the continuous and orderly development of Hong Kong's gold trading ecosystem and further strengthen Hong Kong's position as an international financial center.
Hui Ching-yu said that the HKMA will actively participate in the Hong Kong gold market through various means in response to the pace of market development and actual needs, but the HKMA will not comment on the individual assets of the Exchange Fund or specify its allocation details to the outside world.