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ETF Securities’ HK asset management licence removed

UK-based ETF Securities' licence for asset management in Hong Kong was removed in January, according to the SFC. But the firm reported a strong year for its commodity funds globally.


The firm first obtained an asset management licence in Hong Kong in August 2012, records from the Securities and Futures Commission show.

The firm’s licence removal follows the delisting of its three commodities ETFs in Hong Kong: the Physical Gold ETF, Physical Silver ETF and Physical Platinum ETF.

They were terminated and deauthorised by the SFC and delisted from the Stock Exchange of Hong Kong in August last year, according to information on the firm’s website.

FSA sought more information from ETF Securities (HK), but the firm did not reply as of this writing about the licence removal and whether they will continue to do business in Hong Kong.

Commodity ETFs only account for around 0.3% of overall ETF market capitalisation in Hong Kong, while the five largest ETFs dominate by having 70% of overall market cap, William Chow, managing director of ETF business at Value Partners, said in a previous FSA interview in December. 

At that time, Value Partners temporarily cut the fees of its gold ETF in December in attempt to gather more assets.

Currently, there are seven ETFs in Hong Kong that have commodities as their underlying market, according to information from the Stock Exchange of Hong Kong.

In total, there are 175 ETFs listed in Hong Kong, which include five futures-based ETFs, 142 physical and 28 synthetic.

Commodity-driven inflows

Separately, the UK-based firm reported in late January strong inflows globally, led by commodity funds.

Its commodity products had net inflows of $4.2bn for the full year 2016, with its commodity AUM reaching $17.6bn, according to a statement from the firm.

Commodities were driven by gold, with inflows of $3.4bn, after three years of outflows.

Wealth managers are a key target for the firm, said Mark Weeks, CEO, in the statement.

“The restructuring of our sales team, which took place over 18 months ago, is also bearing fruit, with $800m in inflows from wealth managers,” he said.

Part of the Mark Allen Group.