SFC, CSRC Approve Hong Kong-Mainland ETF Cross-listing

Source: Regulation Asia Manesh Samtani, Regulation Asia 2020-08-31

The new scheme follows the resumption of discussions between the SFC and CSRC in January on setting up an ETF Connect mechanism, after technical issues impeded earlier progress.

Hong Kong’s SFC (Securities and Futures Commission) has authorised two ETFs to be listed on the Hong Kong stock exchange of Hong Kong under a scheme which will facilitate cross-listing of ETFs between markets in Hong Kong and the Mainland.

The scheme follows the resumption of discussions between the SFC and CSRC (China Securities Regulatory Commission) in January on setting up an ETF Connect mechanism, after technical issues impeded earlier progress.

The two ETFs will each invest 90 percent or more of their net asset value in a CSRC-ETF listed on the SZSE (Shenzhen Stock Exchange) through the RQFII (Renminbi Qualified Foreign Institutional Investor) programme.

The CSRC has likewise approved two ETFs to be listed on SZSE under the same scheme. Each will invest 90 percent or more of their net asset value in an SFC-authorized ETF currently listed on SEHK through the QDII (Qualified Domestic Institutional Investor) programme.

“The scheme is a testament to the deepening of cooperation between the Mainland and Hong Kong capital markets, and will provide Hong Kong and Mainland investors with more investment opportunities and product choices through access to each other’s market,” the SFC said in a statement.

These ETFs will be listed on their respective markets under existing listing procedures.

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SFC, CSRC Approve Hong Kong-Mainland ETF Cross-listing

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