Hong Kong's Financial Services and the Treasury Bureau (FSTB) has signed a co-operation agreement with the Shanghai Gold Exchange to deepen links between the two gold markets and support the build-out of Hong Kong’s government-backed gold central clearing system. Alongside the agreement, the bureau set out a broader development blueprint for Hong Kong’s gold market spanning clearing, physical storage and warehousing, cross-boundary processing trade, tax treatment, product development and sustainable governance. The agreement establishes a collaborative governance structure for Hong Kong’s new gold central clearing system: the Hong Kong Precious Metals Central Clearing Company Limited will be wholly owned by the Hong Kong Special Administrative Region Government, with its board chaired by the Secretary for Financial Services and the Treasury and a Shanghai Gold Exchange representative serving as deputy chair. The Shanghai representative will participate in system preparation, rulemaking, admission of participating institutions, and advice on system design and risk management, with an aim to align the clearing system with international standards. The two sides also plan to explore physical infrastructure synergies and market interconnectivity, including leveraging the Shanghai Gold Exchange’s warehousing management regime for secure gold management services and promoting connectivity between on-exchange and off-exchange gold trading, including broader mutual market access through the clearing company and key market participants. Supporting measures include backing Airport Authority Hong Kong and financial institutions to build gold storage facilities with a target of more than 2,000 tonnes of capacity within three years, with Airport Authority Hong Kong pursuing a thousand-tonne-scale warehousing expansion; progressing processing-trade co-operation with Shenzhen via an FSTB memorandum of understanding and encouraging Hong Kong traders to work with qualified Shenzhen refining enterprises; and keeping the government-owned gold central clearing system on track to begin trial operations in 2026. The government also plans to propose in the first half of 2026 extending preferential tax regimes for funds and single family offices to include precious metals as qualifying investments, flagged the listing of a new Hong Kong gold fund with physical redemption at banks and a planned unlisted share class for distribution via licensed digital asset exchanges, and highlighted a market participant outlook on a sustainable gold governance framework and standards.

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