Caroline Chan, Partner at law firm Ogier in Guernsey, was heavily involved in the groundwork which led to Guernsey being given the green light for its companies to list on the Hong Kong Stock Exchange (HKEx). Here, she explains in more detail about what it means for Guernsey's finance industry and the Island's standing as a leading international finance centre.
Why is receiving this approval such an important development for Guernsey's finance industry?
This is an important development for the Guernsey finance industry in a number of ways.
It will assist professionals doing business in the Asia region to promote the Island as a jurisdiction of choice. The HKEx is one of the largest and most successful stock markets in the world. Hong Kong's close trading and business links to other Asian economies, coupled with the HKEx's ability to access capital in the Asia region, offer attractive opportunities to businesses already operating in Asia or considering establishing or developing a presence in the region.
A listing on the HKEx also provides significant investor reach for those wishing to target Asian investors. For those companies not already listed, structuring their HKEx listing using a Guernsey company offers investors a well-respected and well-regulated jurisdiction in which to do business.
Guernsey has a proven track record. It is a jurisdiction of choice for listings on the London Stock Exchange (when compared with its close competitor jurisdictions of Jersey, Isle of Man and Cayman). For promoters of those Guernsey companies which are already listed on another international stock exchange, they can now consider whether a dual or secondary listing on the HKEx will be of benefit to their investors.
How does being able to list on the HKEx benefit companies incorporated in the Island?
There are a number of indirect benefits arising from the ability to list Guernsey companies.
A key benefit is an opportunity to enhance the Island's profile in Hong Kong and the wider Asian region as a jurisdiction of choice. We have a positive message to send. The presence of highly experienced professionals in the Island, within a well-established finance industry, has earned Guernsey its global reputation as a first class international finance centre with a proven track record for attracting investment from around the world.
This particular approval also demonstrates Guernsey's willingness and desire to proactively look outside the Island for new business. From the clients' perspective, entrepreneurs and their families who benefit financially from a successful listing may also look to the Island as a place to arrange their personal affairs, using private wealth business solutions.
Was Guernsey being left behind by other jurisdictions already having received approval for their companies to list on HKEx?
We are always conscious of our competitor jurisdictions' positions and we have been aware that this approval would be of interest to professionals, if only to place us on a level playing field with our competitors.
Over the last two years there has been an increase in the number of jurisdictions applying for approval as an acceptable jurisdiction to list on the HKEx. For example, Jersey and the BVI obtained approval in late 2009. Cayman companies have been able to list on the HKEx for a number of years, reflecting the fact that Cayman structures have been used in Hong Kong for some time.
The benefit of Guernsey's recently obtained approval is that a Guernsey company can now follow a streamlined listing process with the HKEx.
How much business is there for Guernsey in the Far East?
The amount of business which the HKEx approval may bring to Guernsey is difficult to measure at this stage but the ability to list is a plus point for the finance industry. It is another factor which will help to raise Guernsey's profile in the region and it gives professionals an opportunity to explain the benefits of using Guernsey.
The work of Guernsey Finance and Guernsey representatives on the ground in Hong Kong suggests that there are opportunities to develop and expand the Guernsey offering in the region. The ability to list Guernsey companies is one of a number of factors which can be used to promote Guernsey.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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