Hong Kong sets yuan-trading timeline, backing Beijing’s push to boost currency’s use

Hong Kong's securities regulator, the Securities and Futures Commission (SFC), plans to launch a yuan-trading counter in a cross-border channel connecting mainland Chinese investors by July 1, 2024. This move, announced on Wednesday, is part of the SFC's strategic action plan to support the implementation of Hong Kong's first five-year plan and the 2026 policy address by Chief Executive John Lee Ka-chiu.

SFC chairman Kelvin Wong Tin-yau expressed the hope that Hong Kong will become not only a hub for yuan products but also a platform for yuan asset allocation and risk management. The inclusion of a yuan counter via the Southbound Connect scheme would enable mainland Chinese investors to buy and settle Hong Kong-listed shares directly in yuan, bypassing the need to convert their currency into Hong Kong dollars first.

The SFC CEO, Julia Leung Fung-yee, confirmed that the regulator aims to expand the range of yuan-denominated products. The revised timeline could potentially coincide with the 30th anniversary of Hong Kong's return to Chinese rule on July 1, 1997. The SFC also plans to encourage a wider range of products, such as exchange-traded funds and various asset classes, to be denominated, settled, and traded in yuan.