Hong Kong begins trial of new central gold trading system, with first transactions complete and first bullion deposited

Hong Kong’s Financial Services and the Treasury Bureau (FSTB) announced the launch of the initiative earlier today.

"The National 15th Five-Year Plan incorporates explicit support for Hong Kong in establishing a commodity trading ecosystem,” Financial Secretary Paul Chan said. “The commencement of the trial operation of the gold central clearing and settlement system today marks a significant step forward in developing Hong Kong's gold trading infrastructure. Along with a series of measures to promote physical delivery, develop investment and derivative products as well as risk management tools, provide tax concessions, and deepen connectivity with the Mainland gold market, we are committed to building a thriving gold trading ecosystem.”

“This will further enhance the richness, depth, and breadth of our financial markets, create new investment opportunities for local and overseas investors, and inject new momentum into the development of the financial sector,” Chan added.

Hong Kong's new central clearing and settlement system for gold is part of a broader set of targeted initiatives aimed at building a modern, full-chain gold trading ecosystem in the semiautonomous region.

According to the government’s announcement, these initiatives include the rollout of “the initial phase of Delivery Connect with the Shanghai Gold Exchange, launching a new HAU price ticker, expanding storage capacity and refining capability, diversifying gold investment products, exploring tax incentives, co-ordinating insurance arrangements, enhancing flexibility of Mandatory Provident Fund (MPF) investments in gold exchange-traded funds (ETFs), and establishing an industry-led trade association.” Collectively, these measures are intended to build out Hong Kong's role as a trusted international gold trading, clearing, and reserve hub.

"The commencement of the trial operation of our central gold clearing and settlement system is fully supported by a holistic package of support measures,” Secretary for Financial Services and the Treasury Christopher Hui said. “Our vision is to build a scalable and integrated platform with trusted capabilities in clearing, connectivity, price discovery, risk management, storage, and insurance for global participants. The diversified strategic initiatives demonstrate the Government's commitment to building a comprehensive and internationally competitive gold ecosystem, thus consolidating and enhancing Hong Kong's status as a leading gold centre in Asia and beyond.”

The trial operation of Hong Kong’s new gold central clearing and settlement system for gold began today, with multiple transactions already completed.

“Operating under the governance of the Hong Kong Precious Metals Central Clearing Company Limited (HKPMCC), a wholly government-owned entity, the system provides efficient and reliable clearing and settlement services for bilateral and over-the-counter (OTC) gold transactions,” the announcement stated. “In tandem with the commencement of the trial operation, the first batch of gold has been successfully deposited into the designated vault, and the first batch of trading and settlement activities has also been completed.”

“The trial operation has received strong support from key market participants, including banks and financial institutions, mining companies, refiners, jewellers, and institutional participants,” they added.