The Securities and Futures Commission (SFC) today released the findings of its annual Asset and Wealth Management Activities Survey, previously known as the Fund Management Activities Survey, which shows that the asset and wealth management business (Note 1) in Hong Kong amounted to $24,270 billion (US$ 3,108 billion) (Notes 2 and 3) as at 31 December 2017.
To provide a more comprehensive overview this year, the scope of the survey has been extended to cover private banking and private wealth management clients’ accounts (Note 4).
“The survey findings illustrate the sustained growth of Hong Kong’s asset and wealth management industry. This is fully in line with our determination to further develop Hong Kong as a full-service global asset management centre and a preferred place of fund domicile,” said Mr Ashley Alder, the SFC’s Chief Executive Officer.
Major findings of the survey include the following:
- Overseas investors remained a major source of funding for the asset and wealth management business, accounting for 66%.
- The asset management and fund advisory business conducted by licensed corporations and registered institutions grew by 23% to $17,511 billion (US$2,242 billion).
- The total assets under management of the private banking and private wealth management business amounted to $7,812 billion (US$1,000 billion) (Note 3), of which 52% was invested in mainland China and Hong Kong.
- The number of Hong Kong-domiciled SFC-authorised funds increased 7% to 755 and their net asset value increased 30% to $1,244 billion (US$159 billion).
- More than 50% of the asset management business was managed in Hong Kong over the past five years.
The survey report also summarises a number of initiatives the SFC is actively pursuing to enhance the development of the asset management sector. Following the launch of Mainland-Hong Kong Mutual Recognition of Funds (MRF) in 2015, the SFC concluded MRF arrangements with Switzerland and France in 2016 and 2017. More are now under discussions. The new legal framework for open-ended fund companies will take effect on 30 July 2018. In addition, enhancements to asset management regulation and point-of-sale transparency will come into effect in November and August 2018, whilst the new guidelines on online distribution and advisory platforms will take effect in April 2019.
The survey is an annual exercise to help the SFC assess the state of the industry for policy and operational planning. This year, a total of 572 firms responded to the survey on a voluntary basis. They included 508 licensed asset management and fund advisory corporations, 44 registered financial institutions and 20 insurance companies (Note 5).
- Asset and wealth management business comprises asset management, fund advisory business, private banking and private wealth management business and SFC-authorised real estate investment trusts (REIT) management business. Please see the appendices for some key findings.
- Unless stated otherwise, the values given are in Hong Kong dollars.
- Due to the extension of the scope of the survey, comparative figures are not available.
- These include assets under private banking and private wealth management clients’ accounts which are generated, managed or served by Hong Kong relationship managers of licensed corporations and registered institutions that are part of a larger banking group, or for which the relationship managers are accountable.
- Respondents fall into three categories:
(i) asset management and fund advisory companies licensed under section 116 or 117 of the Securities and Futures Ordinance (SFO);
(ii) registered institutions under section 119 of the SFO, which are authorised financial institutions as defined in section 2(1) of the Banking Ordinance; and
(iii) insurance companies registered under the Insurance Ordinance providing services that constitute classes of long-term business as defined in Part 2 of the First Schedule of the Insurance Ordinance and are not licensed by the SFC.