Asset Manager Stewardship Essential to Hong Kong Wealth Hub, Says SFC

Hong Kong’s securities regulator has called on investment firms to strengthen asset manager stewardship practices, arguing that active engagement with investee companies is essential to maintaining the city’s competitiveness as a global wealth-management centre.

Securities and Futures Commission chairman Kelvin Wong Tin-yau said stewardship should be regarded as a professional responsibility rather than an optional activity.

Wong noted that Hong Kong has overtaken Switzerland as the world’s largest cross-border wealth-management hub, but warned that scale alone does not guarantee long-term influence or market quality.

Effective asset manager stewardship can help reinforce board independence, management accountability and alignment between executive compensation and shareholder interests.

He said the rapid growth of passive investing has reduced costs and broadened market access, but index-tracking managers often lack incentives to engage deeply with portfolio companies, creating a free-rider problem.

Weak engagement could ultimately undermine governance standards across listed companies.

The remarks highlight increasing expectations from regulators that institutional investors play a more active role in promoting sustainable value creation and strong corporate governance.