Hong Kong Securities and Futures Commission's Liang Fengyi: Shaping a New Growth Curve in the Market through Artificial Intelligence and the Internationalization of the Renminbi, Currently Considering Whether Further Guidance on AI Applications Is Needed.

At the panel discussion of the Hong Kong Banking Association's Annual Excellence Lecture and Luncheon, the CEO of the Hong Kong Securities and Futures Commission, Ashley Alder, emphasized that artificial intelligence (AI) and the internationalization of the renminbi are the twin engines driving China's economic growth and are also vital forces leading the Hong Kong market into the next phase of growth. He mentioned that the Hong Kong Securities and Futures Commission is considering whether further guidance is needed to assist institutions in applying existing regulatory principles in agency-based AI scenarios. This is not intended to regulate the technical design details but to clarify the regulatory outcomes expected by the Commission: clearly defined responsibilities and effective human oversight, establishment of controlled access permissions and specification of application scope, robust testing prior to deployment and ongoing monitoring afterwards, ensuring operational resilience, and prompt reporting and remedial action when problems arise. Regarding technological transformation, Alder noted that responsible innovation is a core regulatory principle for the Hong Kong Securities and Futures Commission. Hong Kong is one of the few markets worldwide that can balance AI research and development, financing, promoting AI to investors, and regulating it. Hong Kong is also broadly benefiting from China's strong capabilities across the entire AI value chain. For the development of Hong Kong as an international financial center, AI brings three major benefits: enhancing investor outcomes, deepening capital formation, and empowering intermediary institutions to create greater value. Through AI, investors can utilize more effective tools to deepen their understanding of information, obtain quality investment advice, compare different options, and make more informed decisions. In addition, Alder stated that Hong Kong is embracing a massive opportunity to connect different enterprises along the AI value chain with international, mainland, and regional capital. Investors can also take advantage of Hong Kong to share in the benefits brought about by the growth of strategic technology industries. In the discussion, he also pointed out that as AI applications in licensed institutions under the Commission continue to increase, AI is improving the efficiency, consistency, and customer service levels of intermediaries, while allowing human resources to focus on higher-value strategic judgment and stakeholder communication. Consolidating Hong Kong's advantages as a leading offshore renminbi hub On the internationalization of the renminbi, Alder indicated that building a deeper and broader renminbi ecosystem is one of the primary tasks for the Hong Kong Securities and Futures Commission to solidify Hong Kong's status as a global leader in offshore renminbi business. This work is especially important in the current environment, as China's competitive advantage in the green technology sector further promotes the internationalization of the renminbi, while amid increasing global uncertainties, international investors are also accelerating diversification into non-dollar assets. Alder pointed out that both investors and enterprises require a more complete set of renminbi tools for financing, investment, hedging, and liquidity management. Currently, Chinese government bonds and dim sum bonds are the main renminbi products, with the latter's issuance increasing significantly since 2026. Moreover, the Hong Kong market is technically ready to welcome renminbi trading counters into the Stock Connect program. Alder stated that the efficient acquisition of renminbi funding and deepening liquidity are crucial. Hong Kong is developing fixed income and currency trading platforms to facilitate the connection between onshore and offshore renminbi markets, enhancing trading efficiency. In addition, the scope of using renminbi fixed income instruments as collateral in the offshore market will be expanded by the end of 2026 to include the Hong Kong Futures Clearing Corporation and the Hong Kong Exchanges and Clearing Limited options clearing. Alder also mentioned that as offshore renminbi business continues to deepen, effective risk management tools are essential for maintaining investor confidence and promoting market participation. Currently, the scale of onshore bonds held by offshore investors has exceeded 3 trillion renminbi, and the five-year Chinese government bond futures launched in early August in Hong Kong provide them with a practical tool to hedge against related holding risks. The Commission also supports Hong Kong Exchanges and Clearing Limited in launching more renminbi forex futures and renminbi-denominated gold futures, while simultaneously researching further optimization of the swap links, such as adding more reference rates. In summary, Alder stated that we are at an important historical moment, where both AI and the internationalization of the renminbi present once-in-a-lifetime opportunities we should seize these opportunities with grand ambitions while adhering to good governance principles, establishing robust oversight, and focusing on creating substantial value for investors, clients, the market, and the entire economy.