Hong Kong Gold Central Clearing System Trial Operation

(CNA Hong Kong, July 7) To further develop Hong Kong into a gold trading center, relevant Hong Kong authorities today launched a trial operation of a brand-new gold central clearing and settlement system.

The Financial Services and the Treasury Bureau announced that this gold settlement system is supervised and operated by the wholly government-owned Precious Metals Clearing Company Limited. A series of supporting measures are also launched simultaneously to establish a modern and full-chain gold trading ecosystem.

Related supporting measures include the launch of the first phase of "Physical Connectivity" with the Shanghai Gold Exchange, expanding storage capacity and enhancing refining output, enriching gold investment products, researching tax incentives, coordinating insurance arrangements, and increasing the flexibility for the Mandatory Provident Fund (Hong Kong retirement fund) to invest in gold exchange-traded funds (ETFs).

The Treasury Bureau stated that the purpose of the above measures is to enhance Hong Kong's role as a trusted international hub for gold trading, clearing, and reserves.

Financial Secretary Paul Chan Mo-po said that China's "15th Five-Year Plan Outline" clearly supports Hong Kong in building a commodity trading ecosystem, and the trial operation of the gold settlement system is an important step in developing Hong Kong's gold trading infrastructure.

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said: "The trial operation of Hong Kong's central gold clearing and settlement system is supported by comprehensive supporting measures... The diversified strategic initiatives demonstrate the government's determination to build a comprehensive and internationally competitive gold ecosystem, consolidating and enhancing Hong Kong's position as a leading gold center in Asia and globally."

Hong Kong's gold market has a history of development spanning a century and is one of the world's major gold trading markets. Over-the-counter spot trading is currently the main form of transaction, but it is still cleared by buyers and sellers themselves, lacking a unified central clearing system and causing inconvenience. (Editor: Chou Hui-ying) 1150707

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