Hong Kong’s government is offering to exempt fully vaccinated bankers from the city’s compulsory quarantine, easing the travel restrictions to and from Asia’s financial hub as coronavirus cases ebb.
“Senior executives of licensed corporations or their overseas affiliates who are fully vaccinated and meet the eligibility criteria may apply for exemption from the compulsory quarantine arrangements when they return or travel to Hong Kong,” the Securities and Futures Commission (SFC) said in a circular released on Friday night.
Senior executives – those with regional or global roles – of SFC-licensed firms may apply for four trips per month: two for visitors and two for returning executives, according to the circular. Effective immediately, the exemptions are subject to full and timely disclosure of travellers’ itineraries and strict adherence to movement and accommodation restrictions, the circular said.
“It is reasonable to have a flexible [travel] arrangement, now that Hong Kong’s coronavirus situation is relatively under control,” said Dickie Wong, executive director of research at Kingston Securities. “There should be adjustments along with changes [in the outbreak situation].”
The rule, announced the day after a Hong Kong-Singapore travel bubble was to have taken effect, offers an alternative to resume business travel. The bubble, a bilateral travel arrangement between two destinations, was put on hold for the second time on May 17 when cases spiked in Singapore.
Hong Kong marked a day of zero new coronavirus cases for the first time in more than half a year on May 27, suggesting a promising turnaround in the city’s months-long fight against a fourth wave of Covid-19 infections that emerged last November. First-quarter economic growth beat forecasts, while fundraising via initial public offerings (IPOs) surged more than ninefold, further sign that the city is on the mend from the outbreak.
The move was welcomed by HSBC, the London-based bank that owes more than half of its total revenue to Asia, where Hong Kong is the biggest contributor. Four of the bank’s executives who are poised for relocation to Hong Kong this year, are likely to be eligible for the SFC’s quarantine exemptions.
HSBC’s chief executive Noel Quinn and his cross-town competitor Bill Winters of Standard Chartered Bank underwent mandatory quarantines when they flew to Hong Kong in 2020, rare business travels during a year of lockdowns.
“While the pandemic has showed how much could be accomplished virtually, a measured approach to facilitate business travels to and from Hong Kong will create a multiplier effect, stimulating more economic activity across a wide range of sectors,” a bank spokesperson said in a statement, pointing out that 70 of the world’s largest 100 banks have operations in the city. “Safeguarding public health and allowing business travel to gradually get back to normal can co-exist.”
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Hong Kong, the second largest capital market in Asia, is also an essential hub for global business and finance. When HSBC’s chief executive Noel Quinn undertook his sole business trip in 2020, he chose to fly to Hong Kong, where he underwent a mandatory quarantine.
“It is a good start to allow bankers to travel across the border easier,” said Christopher Cheung Wah-fung, the chief executive of Christfund Securities, who represents the financial services industry in the city’s legislature. “However, the quota is too limited as only four senior executives may apply the exemption of quarantine every month. It is just not going to be enough to handle so many IPOs, mergers and acquisitions.”
According to the rules, applications for the quarantine exemption must be made with a detailed itinerary of the proposed exempted executive for the entire duration of the trip to Hong Kong, as well as a record of Covid-19 vaccination from an approved vaccine.
The form should be signed by a responsible officer or the manager-in-charge of compliance function, who bears the responsibility for ensuring the accuracy and authenticity.
Applications should be submitted to the SFC at least five working days before travelling. Successful applicants will receive an electronic authorisation letter issued by the Financial Services and the Treasury Bureau (FSTB).
To be sure, a unilateral exemption by Hong Kong may not be reciprocated by other authorities, including mainland China, which subject visitors to mandatory quarantine.
“While a travel bubble is still the best, having a side without quarantine is better than none,” said Norman Chan, chief investment officer at GlobalWay Development, adding that the restrictions are “acceptable” as “the time [related] opportunity cost is not too high without quarantine.”
Still, any trip to Hong Kong under the quarantine exemption comes with restrictions. Only essential business activities should be included in the itinerary. Meals with others, and social activities should not be included.
Visiting executives are only allowed to leave their designated accommodation for approved activities set out in the itinerary. There should also be Covid-19 tests, point-to-point transport, self isolation and medical surveillance.
The itinerary should include contact details of the people meeting the executive in Hong Kong. Any changes to the itinerary should be submitted to the SFC upon arrival.
The company should submit an attestation form signed by a responsible officer or the manager-in-charge of compliance function of the company every three working days or at the halfway point of the trip, whichever is earlier, and on the last day of the trip, for a visiting executive, or the medical surveillance period, for a returning executive, to the SFC.
In addition, if an exempted person who is subject to self-isolation in a designated quarantine hotel room is found to have breached the self-isolation requirement, the exemption status will be removed immediately and be sent to the quarantine centre for compulsory quarantine for 21 days. Failure to observe the conditions of exemption is liable to a HK$5,000 (US$644) fine and six months imprisonment, according to the rules.