Central gold settlement system in HK completes 1st transaction

The city's Central Clearing and Settlement System for Gold begins trial operations, with its first transaction completed today.

Chief Executive John Lee says the government will explore additional tax incentives to build a comprehensive gold trading ecosystem.

The initiative aims to align with Beijing's 15th Five-Year Plan, which sets sights on turbocharging Hong Kong's development into an international commodities trading hub.

Speaking at a forum, Chief Executive John Lee announces the new clearing system is now in trial operation with a suite of initiatives, and the government will study further tax concessions to encourage the development of a full-chain gold market.

JOHN LEE: "In a world beset with geopolitical crises and macroeconomic uncertainty, gold is becoming one of the key pillars for liquidity and risk management. The launch of Hong Kong's Central Clearing and Settlement System for Gold will create a solid foundation. It will provide a golden opportunity for investors and a wide range of professional services. If gold is the world's safe haven, then Hong Kong will be its safe harbour."

The system features a central ledger that records participating banks' settlement activities, gold transfers and account balances, while connecting with designated vaults to facilitate physical gold deposits and withdrawals.

Pressing ahead, too, are plans to expand Hong Kong's gold storage and refining capabilities.

Also introduced is a new gold price ticker called "HAU", providing a Hong Kong-specific benchmark that enables global investors to reference the city's gold pricing.

Meanwhile, the Financial Services and the Treasury Bureau and the Shanghai Gold Exchange launch the initial phase of Delivery Connect, allowing physical gold to move between Hong Kong and Shanghai.

And the Hong Kong Stock Exchange resumed trading of its US dollar-denominated Gold Futures Contract on Monday.

It is also considering launching a new renminbi-denominated gold futures contract, with delivery support from the Shanghai Gold Exchange.

Financial Secretary Paul Chan says the trial operation marks an important milestone in developing Hong Kong's gold trading infrastructure, enhancing the depth, breadth and sophistication of the city's financial markets.