SGX Signs MoU with SZSE to Establish an ETF Link

Singapore Exchange (SGX) announced yesterday that it has signed a Memorandum of Understanding (MOU) with Shenzhen Stock Exchange (SZSE) to establish an exchange-traded fund (ETF) link, offering investors on both exchanges with a wider range of investment options.

Through the agreement, SGX and SZSE will jointly develop and promote the ETF markets in Singapore and China through the listing of feeder ETFs, which link locally listed ETFs to ones listed on the other exchange. This allows domestic ETF issuers to tap on cross-border capital flows, and investors to access overseas-listed ETFs via domestic exchanges.

“The strong demand for ETFs in Asia underscores the region’s growing role as a global ETF hub and we are excited about the manifold opportunities that this partnership could bring. This also marks our commitment in supporting China’s internationalisation efforts. We look forward to working closely with onshore exchanges in strengthening the ETF markets in Singapore and China, and to more regional collaborations,”Mr. Loh Boon Chye, Chief Executive Officer of SGX, said.

“Under the MOU’s framework, SZSE and SGX will jointly prepare for the SZSE-SGX ETF link, promote cross-border product innovation and connectivity and provide investors in China and Singapore with diversified, cross-border investment opportunities,”Ms. Sha Yan, President & CEO of SZSE added.

As at end November 2021, Singapore-listed ETFs crossed S$12 billion in assets, which was up close to 50% from the same period a year ago. SGX hosts a diverse suite of 35 ETFs across asset classes. SZSE currently lists 212 ETFs with a combined market capitalisation of US$39 billion.