Relocating fund managers and bankers have reportedly received phone calls from a range of government agencies whose questions and tone were deemed unusual compared to past experience.
Financial executives who have relocated from Hong Kong to rival regional hubs, such as Singapore or Tokyo, have received calls from local agencies to inquire about their move, according to a «Financial Times» report citing unnamed sources.
Hedge fund managers described the new calls as new and unusual with inquiries focused on the decision-making process behind relocation and the significance behind the timing of the decision.
Agencies that have reportedly contacted relocating executives include Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA), the Hong Kong Financial Services and the Treasury Bureau (HKFSTB), and the Financial Services Development Council (FSDC).
New Practices
While fund managers noted that the SFC has historically inquired about changes in licensing status from exiting funds, calls from the other agencies as well as their questions and tone were deemed unusual.
The HKMA said it regularly monitors industry practitioners and market developments while the HKFSTB said it had «not conducted any exercise surveying the relocation [or] movement of financial institutions. The FSDC denied making the phone calls.
Financial Relocation
Following the enactment of the national security law in Hong Kong, financial firms increasingly signaled that the business environment had changed. Hedge funds were most notably in the spotlight over fears about the impact on areas like independent research, short selling, investor activism or even difficulties obtaining visas.
The aforementioned report added that financial exits out of Hong Kong would be higher if not for the disruption caused by the coronavirus pandemic.
Recently, one of the largest and oldest hedge funds, Elliott Management, had closed its Hong Kong office and shifted staff to London as well as Tokyo, its only remaining base in Asia.
