Hong Kong, China is a securitization-friendly market. The Hong Kong Monetary Authority (HKMA) issued its regulatory guidelines governing structured products in 1997. A more detailed discussion on securitization can be found below.

Securitization

Hong Kong, China's legal system, based on common law, facilitates the structuring of true sale—as opposed to secured borrowing—transactions. This makes Hong Kong, China a securitization-friendly jurisdiction. The regulatory guidelines that were issued by the Hong Kong Monetary Authority (HKMA) in 1997 on asset securitization and mortgage-backed securities are linked below.

The Hong Kong Mortgage Corporation (HKMC) is the largest issuer of mortgage-backed securities in Hong Kong, China under the Guaranteed Mortgage-Backed Pass-Through Programme and Bauhinia Mortgage-Backed Securitization Programme. The government-owned HKMC was established to buy mortgage loans from various banks and repackage them into negotiable instruments. Under the Bauhinia Mortgage-Backed Securitisation Programme, HKMC successfully launched a series of mortgage-backed securities issues, for both institutional and retail investors. Details of the HKMC's mortgage-backed securities programs can be found by following the links provided below.

In May 2004, the Government completed its debut securitization issue through a special purpose company, Hong Kong 2004 Limited. The Toll Revenue Bond program issued HKD6 billion in notes and retail bonds. This was the first securitization publicly offered to retail investors.