Vibrant market innovation and enhanced global connectivity fuelled notable strides for Hong Kong’s capital markets over the past year with an upturn in fund-raising and trading activities, according to the Annual Report 2024-25 of the Securities and Futures Commission (SFC) released today.
The city has been fast evolving into a future-ready financial hub through accelerated developments in virtual assets and securities tokenisation over the past year. Meanwhile, on the back of reform measures introduced in the recent year, rebounds in IPOs and secondary market trading have catapulted Hong Kong into the world’s top fund-raising platform. Ties with the Mainland and international markets have also been strengthened as well amidst a complex global landscape.
The SFC’s Chairman Dr Kelvin Wong said: “Our role as an effective regulator is to ensure Hong Kong remains a cornerstone of global finance, where capital flows efficiently, innovation thrives and fairness builds trust. As we navigate unprecedented global challenges, regulatory agility, perfect foresight and proactive engagement are crucial to facilitating market development and ensuring our capital markets serve Hong Kong’s long-term economic interests.”
The SFC’s Chief Executive Officer Ms Julia Leung said: “Building on the solid foundation of market resilience, Hong Kong’s long-term success also hinges on our proactive growth strategies: strengthening our core competence as a premier fund-raising and asset management hub and capitalising on the transformative forces of the world to drive sustained growth.”
On the innovation front, the SFC authorised the Asia-Pacific’s first batch of three tokenised money market funds for retail access last quarter, marking a step forward in scaling the tokenisation market (Note 1). The funds had total assets under management (AUM) of $736 million as of end-March (Note 2).
To develop Hong Kong’s virtual asset (VA) ecosystem under the “ASPIRe” roadmap issued earlier this year, the SFC has subsequently allowed two VA ETFs to engage in staking, marking Asia-Pacific’s first such ETFs (Note 3). Meanwhile, the total market capitalisation of six Hong Kong-listed VA spot ETFs had surged 95% and daily turnover risen 16% since their debut last April. For VA trading platforms, the SFC has licensed a total of 11.
Hong Kong’s role as Asia’s premier capital intermediary was also reinforced through new ties with the Middle East. The two Hong Kong ETFs cross-listed on the Saudi Exchange are the largest ETFs there, with a market capitalisation of $14.5 billion (US$1.86 billion) as of May. For Asia’s first Saudi ETF listed in Hong Kong since late 2023, its feeder ETFs cross-listed on Mainland exchanges since mid-2024 now contribute 17% to the master ETF’s market capitalisation.
For Mainland-Hong Kong connectivity, the cumulative southbound inflows of the Stock Connect scheme surpassed $4.35 trillion as of May. The share of southbound trading also increased to 22.5% of Hong Kong’s market turnover.
Other noteworthy highlights for the financial year 2024-25:
a) The SFC worked with the Hong Kong Exchanges and Clearing Limited (HKEX) to enhance the listing application timeframe. Since its launch, the SFC’s average response time for new listing applications has been within 20 business days (Note 4).
b) Hong Kong’s IPO activity has turned vibrant since the Mainland announced supportive measures in April 2024, with a total of 64 Mainland enterprises, including leading companies, listing in the city since the announcement. During the year, IPO funds raised surpassed $100 billion.
c) The total market capitalisation of ETFs and leveraged and inverse (L&I) products in Hong Kong surged 35% year-on-year (YoY) to $520 billion, a record high, with their share of total Hong Kong market turnover reaching 15%. The introduction of single-stock L&I products in 2025 further enhances product diversity.
d) The number of SFC-approved licence applications jumped 20% YoY. Corporate licence applications received by the SFC also increased by a similar percentage.
e) In a landmark ruling, Hong Kong’s High Court imposed the longest prison sentences for a market manipulation case under the Securities and Futures Ordinance. In another case of corporate misconduct, the SFC secured a historic settlement to compensate shareholders of Combest Holdings Limited.
f) To boost anti-scam awareness, the SFC extended the publicity of its “Don’t Be Sucker” campaign through MTR station commercials and a TV infotainment programme, which is estimated to have garnered more than 1.6 million views.
g) To support its sustainable development, the SFC halved its total carbon emissions from the baseline, thus reaching its interim target five years early (Note 5).
The Annual Report, accompanied by a video message, is available on the SFC website, and its Facebook, LinkedIn and WeChat pages.
Notes:
- These include the introduction of tokenised classes to existing SFC-authorised money market funds. The AUM represents that of their tokenised classes.
- Unless otherwise specified, figures are in Hong Kong dollars and for the period from April 2024 to March 2025 or as of end-March 2025.
- See "ASPIRe" roadmap for details.
- This refers to the number of business days in the hands of the SFC and excludes the response time of the applicant and its sponsor.
- The SFC has set the interim goal of halving its carbon emissions by 2030 and ultimate goal of achieving carbon neutrality by 2050.
