Hong Kong SFC & HKMA Sale of Non-Exchange Traded Investment Products Survey 2022: Top 5 Investment Products are Structured Products $245 Billion, Collective Investment Scheme $112 Billion, Debt Securities $82 Billion, Swaps $37 Billion, Repos & Others $6.3 Billion, Top 20 Firms Accounted for 81% of Total $484 Billion Investment Volume, Investment Products Volume Decreased -24% in 2022, Total Investors 898,045, Total Firms 371, Licensed or Relevant Sales Representatives 17,917
6th October 2023 | Hong Kong
The Hong Kong SFC (Securities & Futures Commission) & HKMA (Hong Kong Monetary Authority) have released a joint survey on the Sale of Non-Exchange Traded Investment Products 2022, providing key insights into non-exchanged traded investment products sold by retail banks, private banks, corporate banks, investment advisors, securities brokers & international financial conglomerates. In 2022, the total investment volume in Hong Kong for non-exchange traded investment product is $484 billion (HKD 3.79 trillion), with Structured Products $245 billion (51%), Collective Investment Scheme (CIS) $112 billion (23%), Debt Securities $82 billion (17%), Swaps $37 billion (8%), Repos & Others $6.3 billion (1%). The Investment Products volume decreased by -24% in 2022, with the top industry players highlighting unfavourable market sentiment, volatile market conditions from interest rate hikes, stagflation concerns, continuous impact of the pandemic, heightened geopolitical risks, Mainland’s property market headwinds. The Top 8 Structured Products – Equity-linked Accumulators / Decumulators 30%, Other Equity-linked Products 23%, Other Currency-linked Products 16%, Currency-linked Accumulators / Decumulators 11%, Commodity-linked 6%, Interest rate-linked 4%, Index-linked 4%, Credit-linked 1%. The Top 8 Equity-linked products (81 large firms) – Internet 46%, Automotive 22%, Technology 8%, Multiple Sectors 6%, Financial 5%, Retail 4%, Transportation 3%, Energy 2%. The Top 5 Currency-linked products (large firms) – RMB / USD 45%, JPY / USD 25%, EUR / USD 9%, GBP / USD 8%, AUD / USD 7%. The Top 6 Collective Investment Scheme (CIS) Volume (large firms) – Money market funds 61%, Bond funds 14%, Equity funds 7%, Balanced funds 5%, Private equity funds 4%, Hedge funds 2%. The Top 4 Debt Securities – Sovereign bonds 29%, Corporate bonds Investment grade 28%, Corporate bonds Unrated 23%, Corporate bonds Non-investment grade 15%. The no. of firms doing sale of investment products in 2022 is 371. Top 20 firms (5.3%) accounted for 81% of total investment volume, remaining 351 firms (94.6%) accounted for 19% of total investment volume, and 81 large firms (21.8%) accounted for 95% of total investment volume. The total no. of clients (investors) is 898,045, and no. of clients with at least 1 transaction in 2022 is 820,018. In 2022, there are 83 online Platforms (Investment Products to Investors). The no. of licensed or relevant sales representatives in Hong Kong in 2022 is 17,917, with Licensed Representatives (LCs) at 4,995 and Relevant Individuals (RIs) at 12,922. The survey was sent to 2,380 firms, including 2,269 LCs and 111 RIs, licensed or registered for Type 1, Type 4 or both regulated activities with over 99% respondents. 63 LCs and 18 RIs were regarded as large firms, accounting for 95% of the aggregate transaction amount of all firms. Licensed Corporations (LCs), Registered Institutions (RIs). See below for key findings & summary | View report here
” Top 5 Investment Products are Structured Products $245 Billion, Collective Investment Scheme $112 Billion, Debt Securities $82 Billion, Swaps $37 Billion, Repos & Others $6.3 Billion, Top 20 Firms Accounted for 81% of Total $484 Billion Investment Volume, Investment Products Volume Decreased -24% in 2022, Total Investors 898,045, Total Firms 371, Licensed or Relevant Sales Representatives 17,917 “
Hong Kong SFC & HKMA Sale of Non-Exchange Traded Investment Products Survey 2022
The Hong Kong SFC (Securities & Futures Commission) & HKMA (Hong Kong Monetary Authority) have released a joint survey on the Sale of Non-Exchange Traded Investment Products 2022, providing key insights into non-exchanged traded investment products sold by retail banks, private banks, corporate banks, investment advisors, securities brokers & international financial conglomerates.
Summary – Investment Products
- Total Investment Volume – $484 billion (HKD 3.79 trillion)
- Structured Products – $245 billion (51%)
- Collective Investment Scheme (CIS) – $112 billion (23%)
- Debt Securities – $82 billion (17%)
- Swaps – $37 billion (8%)
- Repos & Others – $6.3 billion (1%)
- Investment Products volume change in 2022 vs 2021 – Decrease -24%
- Top 8 Structured Products – Equity-linked Accumulators / Decumulators 30%, Other Equity-linked Products 23%, Other Currency-linked Products 16%, Currency-linked Accumulators / Decumulators 11%, Commodity-linked 6%, Interest rate-linked 4%, Index-linked 4%, Credit-linked 1%
- Top 8 Equity-linked products (81 large firms) – Internet 46%, Automotive 22%, Technology 8%, Multiple Sectors 6%, Financial 5%, Retail 4%, Transportation 3%, Energy 2%
- Top 5 Currency-linked products (large firms) – RMB / USD 45%, JPY / USD 25%, EUR / USD 9%, GBP / USD 8%, AUD / USD 7%
- Top 6 Collective Investment Scheme (CIS) Volume (large firms) – Money market funds 61%, Bond funds 14%, Equity funds 7%, Balanced funds 5%, Private equity funds 4%, Hedge funds 2%
- Top 4 Debt Securities – Sovereign bonds 29%, Corporate bonds Investment grade 28%, Corporate bonds Unrated 23%, Corporate bonds Non-investment grade 15%
- Top 6 Corporate Bonds Issuers by Country (large firms) – Mainland China 54%, Hong Kong 16%, United States 10%, United Kingdom 8%, Switzerland 3%, Canada 2%
- Top 5 Corporate Bonds by Remaining Duration – Less than 1 year (42%), 1 to 4 years (33%), 5 to 9 years (5%), 10 years & more (3%), Perpetual bonds (17%)
- Top 5 Corporate Bonds by Coupon – 3% to 5% (46%), 6% to 10% (21%), 11% & above (12%), Zero Coupon (9%), Less than 3% (12%)
- Top 4 Swaps – Currency Swaps (large firms), Commodity Swaps on Gold, Total Return Swaps, Equity Swaps on listed equity
Summary
- No. of Firms Doing Sale of Investment Products in 2022 – 371 (2021: 390), decreased 5%
- No. of Licensed Corporations (LCs) – 308 (2021: 327)
- No. of Registered Institutions (RIs) – 63 (2021: 63)
- Top 20 Firms (5.3%) – Accounted for 81% of total investment volume
- Remaining 351 Firms (94.6%) – Accounted for 19% of total investment volume
- 81 Large Firms (21.8%) – Accounted for 95% of total investment volume
- Top players feedback on decrease in investment products volume – Unfavourable market sentiment, Volatile market conditions from interest rate hikes, stagflation concerns, continuous impact of the pandemic, heightened geopolitical risks, Mainland’s property market headwinds
- Total Clients / Investors – 898,045
- Collective Investment Scheme (CIS) – 385,320 clients
- Debt Securities – 447,926 clients
- Structured Products – 62,972 clients
- Swaps – 823 clients
- Repos & Others – 1,004 clients
- No. of Clients with at least 1 Transaction in 2022 – 820,018
- No. of Clients with at least 1 Transaction in 2021 – 980,821
- Online Platforms (Investment Products to Investors) in 2022 – 83 firms
- Online Platforms (Investment Products to Investors) in 2021 – 70 firms
- No. of Licensed or Relevant Sales Representatives in Hong Kong in 2022 – 17,917 (2021: 18,346)
- Licensed Representatives (LCs) – 4,995 (2021: 5,455)
- Relevant Individuals (RIs) – 12,922 (2021: 12,891)
- Firms with more than 500 Licensed Representatives (LCs) or Relevant Individuals (for RIs) – 6
- Firms with more than 101 to 500 Licensed Representatives (LCs) or Relevant Individuals (for RIs) – 37
Hong Kong SFC & HKMA Sale of Non-Exchange Traded Investment Products Survey 2022
1) Hong Kong Non-Exchange Traded Investment Products in 2022
Top Investment Products Volume in 2022:
- Structured Products – $245 billion / HKD 1.92 trillion
- Collective Investment Scheme (CIS) – $112 billion / HKD 884 billion
- Debt Securities – $82 billion / HKD 648 billion
- Swaps – $37 billion / HKD 296 billion
- Repos & Others – $6.3 billion / HKD 50 billion
- Total Volume – $484 billion / HKD 3.79 trillion
Top Investment Products Volume in 2022 (%)
- Structured Products – 51%
- Collective Investment Scheme (CIS) – 23%
- Debt Securities – 17%
- Swaps – 8%
- Repos & Others – 1%
Investment Products Volume Change in 2022 vs 2021
- All Investment Products: -24%
- Structured Products: -19.5%
- Collective Investment Scheme (CIS): -40.7%
- Debt Securities: -20.7%
- Swaps: +8.8%
- Repos & Others: +2%
2) No. of Firms & Market Share
No. of Firms Doing Sale of Investment Products in 2022:
- Total Firms – 371 (2021: 390), decreased 5%
- Licensed Corporations (LCs) – 308 (2021: 327)
- Registered Institutions (RIs) – 63 (2021: 63)
- Total Firms – 371
- Top 20 Firms (5.3%) – Accounted for 81% of total investment volume
- Remaining 351 Firms (94.6%) – Accounted for 19% of total investment volume
- 81 Large Firms (21.8%) – Accounted for 95% of total investment volume
Transaction Volume by Firms:
- Total Transactions – $484 billion (HKD 3.79 trillion), decreased 24%
- Total Transactions by 308 LCs – $113 billion (HKD 891 billion)
- Total Transactions by 63 RIs – $227 billion (HKD 2.9 trillion)
Top players on decrease in investment products volume:
- Unfavourable market sentiment
- Volatile market conditions from interest rate hikes, stagflation concerns, continuous impact of the pandemic, heightened geopolitical risks, Mainland’s property market headwinds.
Top 20 Firms Investment Products Volume in 2022:
- Structured Products – 54% ($212 billion / HKD 1.66 trillion)
- Collective Investment Scheme (CIS) – 23% ($91 billion / HKD 719 billion)
- Debt Securities – 13% ($49 billion / HKD 391 billion)
- Swaps – 9% ($35 billion / HKD 278 billion)
- Repos & Others – 1% ($2.3 billion / HKD 18 billion)
Remaining 351 Firms Firms Investment Products Volume in 2022:
- Structured Products – 35% ($32 billion / HKD 254 billion)
- Debt Securities – 35% ($32 billion / HKD 257 billion)
- Collective Investment Scheme (CIS) – 23% ($21 billion / HKD 165 billion)
- Repos & Others – 4% ($4 billion / HKD 32 billion)
- Swaps – 3% ($2.3 billion / HKD 18 billion)
3) Structured Products
Structured Products Volume – 51% of Total Volume ($245 billion / HKD 1.92 trillion):
- Equity-linked Accumulators / Decumulators – 30% ($73 billion / HKD 576 billion)
- Other Equity-linked Products – 23% ($56 billion / HKD 446 billion)
- Other Currency-linked Products – 16% ($38 billion / HKD 304 billion)
- Currency-linked Accumulators / Decumulators – 11% ($26 billion / HKD 206 billion)
- Commodity-linked – 6% ($14 billion / HKD 113 billion)
- Interest rate-linked – 4% ($10 billion / HKD 79 billion)
- Index-linked – 4% ($9.9 billion / HKD 78 billion)
- Credit-linked – 1% ($2.5 billion / HKD 20 billion)
- Others (eg. hybrid-linked) – 5% ($12 billion / HKD 99 billion)
Structured Products Volume 2022 vs 2021:
- Equity-linked accumulators / decumulators: -35.1%
- Other equity-linked: -43.2%
- Currency-linked accumulators / decumulators: +57.2%
- Other currency-linked: -0.3%
- Commodity-linked: -13.7%
- Interest rate-linked: +38.5%
- Index-linked: +136%
- Credit-linked: +42.8%
- Others: +147%
Top Equity-linked products (81 large firms):
- Internet – 46%
- Automotive – 22%
- Technology – 8%
- Multiple Sectors – 6%
- Financial – 5%
- Retail – 4%
- Transportation – 3%
- Energy – 2%
- Others – 4%
Top Currency-linked products (large firms):
- RMB / USD – 45%
- JPY / USD – 25%
- EUR / USD – 9%
- GBP / USD – 8%
- AUD / USD – 7%
- Others – 6%
4) Collective Investment Scheme (CIS)
Collective Investment Scheme (CIS) – 23% ($112 billion, HKD 884 billion):
- Top 20 sellers accounted for 86% of total Collective Investment Scheme (CIS)
Collective Investment Scheme (CIS) Volume – 2022 vs 2021
- Authorized Collective Investment Scheme: -48.4%
- Non-Authorized Collective Investment Scheme: -28%
Top Collective Investment Scheme (CIS) Volume (large firms):
- Money market funds – 61%
- Bond funds – 14%
- Equity funds – 7%
- Balanced funds – 5%
- Private equity funds – 4%
- Hedge funds – 2%
- Others – 7%
5) Debt Securities / Bonds
Debt Securities – 17% ($82 billion / HKD 648 billion):
- Top 20 sellers accounted for 76% of total Debt Securities
Top Debt Securities:
- Sovereign bonds – 29% ($24 billion, HKD 188 billion)
- Corporate bonds Investment grade – 28% ($22 billion, HKD 177 billion)
- Corporate bonds Unrated – 23% ($19 billion, HKD 150 billion)
- Corporate bonds Non-investment grade – 15% ($12 billion, HKD 99 billion)
- Others – 5% ($4.3 billion, HKD 34 billion)
Debt Securities Volume – 2022 vs 2021
- Corporate bonds Investment grade: -8.3%
- Corporate bonds Non-investment grade: -57.1%
- Corporate bonds Unrated: -37.7%
- Sovereign bonds: +50.4%
- Others: +21.4%
Top Corporate Bonds Issuers by Country (large firms):
- Mainland China – 54%
- Hong Kong – 16%
- United States – 10%
- United Kingdom – 8%
- Switzerland – 3%
- Canada – 2%
- Others – 7%
Top Corporate Bonds by Remaining Duration:
- Less than 1 year – 42%
- 1 to 4 years – 33%
- 5 to 9 years – 5%
- 10 years & more – 3%
- Perpetual bonds – 17%
Top Corporate Bonds by Coupon:
- 3% to 5% Coupon – 46%
- 6% to 10% Coupon – 21%
- 11% & above Coupon – 12%
- Zero Coupon – 9%
- Less than 3% Coupon – 12%
6) Swaps
Swaps – 8% ($37 billion / HKD 296 billion):
- Registered Institutions accounted for 91% of Swaps
Top Swaps Products:
- Currency Swaps (large firms) – 86%
- Commodity Swaps on Gold
- Total Return Swaps
- Equity Swaps on listed equity
7) Outstanding Positions Held on Behalf of Clients & Contracting Parties (31/12/22)
Outstanding Positions:
- Collective Investment Scheme (CIS) – 51.5% ($224 billion / HKD 1.76 trillion)
- Debt Securities – 27.7% ($121 billion / HKD 949 billion)
- Structured Products – 15.9% ($69 billion / HKD 546 billion)
- Swaps – 4.1% ($17 billion / HKD 140 billion)
- Repos & Others – 0.8% ($3.4 billion / HKD 27 billion)
- Total Outstanding Positions – $436 billion (HKD 3.42 trillion)
8) No. of Clients / Investors
No. of Clients:
- Collective Investment Scheme (CIS) – 385,320 clients
- Debt Securities – 447,926
- Structured Products – 62,972
- Swaps – 823
- Repos & Others – 1,004
- Total Clients – 898,045
No. of Clients with at least 1 Transaction:
- 2022 – 820,018
- 2021 – 980,821
No. of Clients with at least 1 Transaction in 2022:
- Individual Professional Investors (Clients of LCs) – 14,378
- Individual Professional Investors (Clients of RIs) – 50,749
- Corporate Professional Investors (Clients of LCs) – 3,744
- Corporate Professional Investors (Clients of RIs) – 9,146
- Non-Professional Investors (Clients of LCs) – 222,426
- Non-Professional Investors (Clients of RIs) – 519,579
Licensed Representatives (LCs)
Registered Institutions (RIs)
9) Online Platforms in Hong Kong
Online Platforms (Investment Products to Investors):
- 2022 – 83 firms
- 2021 – 70 firms
10) No. of Licensed or Relevant Sales Representatives in Hong Kong
- Total sales force in 2022 – 17,917 (2021: 18,346)
- Licensed Representatives (LCs) – 4,995 (2021: 5,455)
- Relevant Individuals (RIs) – 12,922 (2021: 12,891)
Licensed Representatives (LCs) or Relevant Individuals (for RIs):
- 5 or fewer – 214 firms
- 6 to 50 – 96 firms
- 51 to 100 – 28 firms
- 101 to 500 – 37 firms
- More than 500 – 6
Hong Kong SFC & HKMA Sale of Non-Exchange Traded Investment Products Survey 2022
The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) conducted an annual joint survey on the sale of non-exchange traded investment products by licensed corporations (LCs) and registered institutions (RIs) to non-professional investor clients, individual professional investors (PIs)1 and certain corporate PIs for whom intermediaries cannot make use of a waiver of the suitability obligation2. The survey covered the sale of investment products from 1 January to 31 December 2022 (the reporting period). The survey was designed to collect information about the types and value of investment products sold. The information collected helps the SFC and HKMA better understand market trends, identify risks associated with the selling activities of intermediaries and coordinate their responses to address areas of common concern. We believe that the information would also be useful to market participants.
- The survey covered transactions of investors who opened accounts with LCs, RIs or related companies of LCs or RIs outside Hong Kong and to whom investment products were sold by licensed representatives (for LCs) or relevant individuals (for RIs) in Hong Kong regardless of where the transactions were booked. Sales to institutional PIs and other corporate PIs for whom intermediaries can rely on a waiver of the suitability obligation, were not covered in the survey.
- The survey covered the sale of non-exchange traded investment products, such as collective investment schemes (CIS), debt securities, structured products, swaps and repos. The survey excluded leveraged foreign exchange products which were not structured products, insurance products, mandatory provident funds, pooled retirement funds, exchange-traded funds, futures contracts, listed securities, exchange-traded derivatives, paper gold schemes and certificates of deposit. The survey also did not cover certain structured products sold by RIs3.
- LCs and RIs with respective total transactions amounting to $1 billion or more and $30 billion or more during the reporting period (collectively, large firms) were requested to provide further details about the investment products they sold, such as the transaction amount of products by types of investors and the details of the top five products ranked by transaction amount.
The survey was sent to 2,380 firms, including 2,269 LCs and 111 RIs, licensed or registered for Type 1, Type 4 or both regulated activities. Over 99% responded (respondent firms). A total of 308 LCs and 63 RIs (2021: 327 LCs and 63 RIs) reported that they had sold investment products to investors during the reporting period. These firms included retail, private and corporate banks, investment advisors, securities brokers and international financial conglomerates. Among these firms, 63 LCs and 18 RIs (same as 2021) were regarded as large firms for the purpose of this survey. The large firms accounted for 95% (2021: 94%) of the aggregate transaction amount of all firms.
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