The 2026 Budget Speech by the Financial Secretary outlines Hong Kong's strategies to consolidate its strengths as a global financial center, with a focus on enhancing internationalisation of the Renminbi, improving the securities market, promoting innovation in the bond market, and expanding asset and wealth management. The government will also explore emerging sectors like corporate treasury centers and digital asset markets, strengthening market systems and risk control, and promoting financial inclusiveness.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On 25 Feb 2026, the Budget Speech by the Financial Secretary reaffirms Hong Kong's commitment to maintaining its status as a leading international financial center amidst evolving global conditions. The government has outlined strategic measures to bolster the financial system and strengthen Hong Kong's role within it.
The speech underscores efforts to advance the internationalization of the Renminbi ("RMB") by doubling the size of the RMB Business Facility to RMB200 billion, promoting foreign exchange quotations, and issuing RMB bonds of varying maturities. These measures aim to foster an offshore RMB yield curve and attract high-quality issuers.
The government is enhancing the securities market through Severe Weather Trading arrangements, which ensured market liquidity and generated $2.5 billion in stamp duty revenue. Revisions to listing requirements and the IPO process are also on the horizon, while over-the-counter trading platforms for delisted stocks are being explored.
In the bond market, the government is implementing a development roadmap that includes boosting primary market issuance, enhancing liquidity, and expanding offshore RMB business. An electronic bond-trading platform is expected to launch in the second half of 2026. Additionally, the third batch of tokenized bonds is being issued, with plans for ongoing digital bond issuances through the Digital Bond Grant Scheme.
Asset and wealth management initiatives focus on increasing the number of single-family offices in Hong Kong. The government aims to attract more through tax regime enhancements and expanded tax concessions. The Integrated Fund Platform under the HKEX will expand its services this year, covering fund sales procedures to enhance market efficiency.
The Budget Speech highlights plans to bolster Hong Kong's appeal as a platform for 'bringing in and going global' by providing tax incentives and flexibility to Corporate Treasury Centers ("CTCs") and their associated companies. Measures to relax the criteria for stamp duty relief on intra-group asset transfers are also proposed.
The development of digital assets is a key focus, with the government intending to introduce a licensing regime for digital asset dealers and custodian service providers this year. The licensing regime for fiat referenced stablecoin issuers has been implemented, with the first licenses to be issued next month.
To support tokenisation technology, the government will provide guidelines for distributed ledger-based registers of debenture holders and explore the use of electronic signatures for bond issuance documents. The Inland Revenue Ordinance will be amended to implement the Crypto-Asset Reporting Framework and the amended Common Reporting Standard by the OECD in the next two years.
The Hong Kong Monetary Authority ("HKMA") launched the pilot phase of Project Ensemble to enable real value transactions involving tokenized deposits and digital assets. The system will be continually upgraded to support 24/7 settlement and develop local standards for interoperability. Project Cargo is exploring enhancements to the digital ecosystem for trade finance.
An international gold trading market is being built through tax incentives, setting up an industry-led trade association, and providing industry skills development. The CMU OmniClear and HKEX will study establishing a one-stop multi-asset class post-trade securities infrastructure to enhance liquidity and risk management.
The CMU plans to establish a digital asset platform this year to support digital bond issuance and settlement, eventually extending to other digital assets and linking with regional tokenisation platforms. The development of non-traditional risk management will continue, with captive insurance companies being established in Hong Kong.
The Mandatory Provident Fund Schemes Authority ("MPFA") will implement 'Full Portability' starting with employees whose employment commenced on or after 1 May 2025. The MPFA also proposes enhancing recovery of default contributions and providing flexibility for trustees in MPF investments.
The Insurance Authority will enhance the risk-based capital regime for insurance companies by adjusting risk parameters and providing capital relief for infrastructure investments. A standardised disclosure checklist for capital adequacy and risk profile will be adopted.
The regulation of money lenders will be strengthened to address excessive borrowing and protect the public. Specific measures will be announced next month.
The Asian Infrastructure Investment Bank ("AIIB") plans to set up an office in Hong Kong, with government support. Hong Kong will host various financial mega events in 2026, including the Global Financial Leaders' Investment Summit and the Wealth for Good in Hong Kong Summit, as well as the Asian Financial Forum celebrating its 20th anniversary next year.
The Financial Secretary's Budget Speech underscores a comprehensive strategy to strengthen Hong Kong's financial sector and enhance its global standing, with a focus on technological innovation, regulatory improvements, and market expansion.
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