The chairman of the Chinese Securities Association of Hong Kong told a top business audience on Monday that he expects the launch of the second Qualified Domestic Institutional Investor program by the end of this year, and for it to "fundamentally alter the investment structure of the Hong Kong capital market" by allowing further overseas expansion by mainland brokerages.

Yim Fung said that the launch of QDII2 means mainland finance houses based in Hong Kong can leverage on the city's financial competitiveness to seek more international business.

He added the investment structure will be altered "because domestic individual investors are more prone to investing in small-to-medium-sized, high-growth companies rather than large-capitalization stocks".