Hong Kong Government Uses FinTech Sandboxes to Spur Innovation

The Hong Kong government, he said will "keep abreast" of developments in countries that have implemented regulatory sandboxes for fintech activity. He added that it will examine if existing regulations in Hong Kong are sufficient to drive growth, or if changes need to be made.

"We will keep abreast of the development following the implementation of the sandboxes, and examine whether exemptions provided in the existing regulations in Hong Kong could achieve the same effect," Chan said.

Chan's statement was in reply to a question from Chan Kin-por, a member of Hong Kong's Legislative Council, on whether authorities would study the provision of a sandbox testing environment to encourage start-up companies to develop their businesses in Hong Kong.

"The industry welcomes the exemption arrangement, as they see it [as] a helpful measure which allows the industry to launch innovative fintech products and services to [the] market in a smaller scale for the purpose of conducting trials," Chan said.

Chan also noted that regulators in the UK, Australia and Singapore "are carefully prescribing the confines of the sandboxes in which rules are relaxed for specific types of fintech businesses that meet the eligibility criteria," and have arrangements in place to protect potential investors.

A Bridge

Chan said that Hong Kong's position as a business center and a connecting point between Mainland China and the various other global markets provides an ideal position for developing fintech in the region.

As an example, on June 13, the Financial Services and the Treasury Bureau signed an agreement with the Shanghai Municipal Government Financial Services Office on further financial cooperation between Hong Kong and Shanghai on various areas, including fintech.

"Support will be given to fintech companies in Shanghai and Hong Kong to assist the former to ‘go global' by using Hong Kong as a platform and the latter to gain access to the Mainland market via Shanghai," Chan said. "In addition, Hong Kong Science and Technology Park and Cyberport will facilitate start-up companies in fintech and other sectors to enter the Mainland market by organizing roadshows and providing support through their Mainland representative offices."