Structured Finance and Securitisation 2010: Country Q&A - Hong Kong
Mondaq Business Briefing › Hong Kong Law Articles in English (2010)
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Structured Finance and Securitisation 2010: Country Q&A - Hong Kong
Keywords: securitisation market, Hong Kong, mortgage-backed securities, RMBSs, HKMC
MARKET AND LEGAL REGIME 1. Please give a brief overview of the securitisation market in your jurisdiction. In particular: How active and/or developed is the market and what notable transactions and new structures have taken place recently? To what extent have central bank liquidity schemes assisted the securitisation market in your jurisdiction? Were retained securitisations common in the last 12 months? Is securitisation particularly concentrated in certain industry sectors? Despite having a developed legal framework to support securitisation, Hong Kong has a low level of securitisation activity. This is generally due to the ready availability of other more conventional types of funding at inexpensive rates. The most significant securitisation activity over the past decade has been the domestic issuance of residential mortgage-backed securities (RMBSs) by the Hong Kong Mortgage Corporation (HKMC), creating a robust secondary mortgage market. Over the past 12 months, market activity has remained relatively inactive due to both: The global financial crisis. Recent bad publicity in the Hong Kong media relating to retail structured products following the global insolvency of Lehman Brothers. The Hong Kong Monetary Authority (HKMA), the principal financial regulator, has not formally introduced any liquidity schemes to assist the securitisation market. However, the HKMA actively supports financial markets in other ways, such as the guaranteeing of bank deposits. 2. Is there a specific legislative regime within which securitisations in your jurisdiction are carried out? In particular: What are the main laws governing securitisations? Is there a regulatory authority? There are no securitisation-specific laws or regulatory authorities in Hong Kong. On 1 July 1997, Hong Kong became the Hong Kong Special Administrative Region (HKSAR) of the Peopl...See the full content of this document
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