Stock update: Secretary for Financial Services & the Treasury Professor KC Chan (right) tours the Tokyo Stock Exchange.

Secretary for Financial Services & the Treasury Professor KC Chan says the Government is preparing law changes to the tax regime to level the playing field for Islamic bonds with conventional bonds.

Speaking at the Islamic Finance Symposium 2009 in Tokyo today, Prof Chan said Hong Kong, being an international financial centre, will implement a conducive platform for the development of Islamic finance. The sector's huge market potential is shown by double-digit growth in Shariah-compliant assets over the past decade, which has driven Islamic financiers to look beyond historical boundaries to explore new territories, both within and outside the Muslim world.

"We believe Hong Kong is well placed to become a centre for Islamic finance in Asia. Our sound financial services infrastructure and well-established legal system make Hong Kong an attractive location for such investments," he said.

Prof Chan said many conventional and reputable financial institutions have entered the market, offering products and asset-management service driven by the accumulation of wealth of both individuals and institutions, particularly in the Gulf and emerging Asia.

The city's unique advantage, he said, is its unrivalled role in bridging the Mainland to the international market. By bridging the investment needs of the Middle East with the capital needs of the Mainland, Hong Kong can be the trusted platform in linking the new Silk Road, he added.

Prof Chan later visited the Tokyo Stock Exchange where its President and CEO Atsushi Saito briefed him on the latest developments in Japan's equities market.