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AN INTRODUCTION TO DOING BUSINESS IN HONG KONG 2017
Financial system
The Hong Kong financial system is composed of four different financial regulators, each one
governing different parts of the financial sector. These include the Securities and Futures
Commission (SFC, an independent body set up to regulate the securities and future markets),
the Mandatory Provident Fund Schemes Authority (MPFA, a statutory body set up to assist Hong
Kong’s workforce to accumulate savings for their retirement), the Office of the Commissioner
of Insurance (OCI, a body set up to protect the interests of policyholders and promotes the
general stability of the insurance industry) and the Hong Kong Monetary Authority (HKMA, the
government’s agency responsible for maintaining monetary and banking stability).
Despite the HKMA’s role as the currency board and de facto central bank, it does not print
currency notes itself. Instead, it grants Hong Kong dollar printing privileges to HSBC, Standard
Chartered Bank and the Bank of China.
Under the Linked Exchange Rates System (LERS), the Hong Kong dollar has been pegged to
the US dollar since 1983, at a rate of HK$7.80 to US$1, which has helped maintain monetary
stability. Through the exchange rate system, the HKMA authorizes note-issuing banks to issue
new banknotes, as long as an equivalent amount of US dollars is deposited with the HKMA.