Hong Kong’s proposed tax concessions for performance fees and carried interest will not be available to proprietary trading firms, putting an end to speculation that the city could extend its asset management incentives to the sector, according to a report by Bloomberg.

The Financial Services and Treasury Bureau said Wednesday that the legislation would exclude businesses that use their own capital to buy, sell or hold assets for profit because such firms do not meet the bill’s definition of a fund.

The clarification comes after reports that Hong Kong authorities were considering whether to extend tax relief on performance-related income to proprietary trading businesses, including major market-making firms such as Jane Street.

The draft legislation was originally designed to provide tax exemptions for private equity and hedge fund managers, as Hong Kong seeks to strengthen its position as an international centre for asset and wealth management.

The government said the proposed measures are intended to refine the tax framework for private funds and family offices and support the development of Hong Kong as a global wealth management hub.

The bill is currently before the Legislative Council, with the government aiming to restart its second-reading debate during the second half of 2026.

The decision to exclude proprietary trading firms means businesses trading exclusively with their own capital will not benefit from the concessions being considered for fund managers.