The Hong Kong Securities and Futures Commission and the China Securities Regulatory Commission said on Friday that they have agreed in principle to including ETFs listed on both Hong Kong and Mainland China exchanges in the stock connect programme.
Eligibility will be based on factors such as fund size and whether the index tracks stocks which are eligible for stock connect, according to a joint media release.
“ETF inclusion in Stock Connect will be mutually beneficial to both mainland China and Hong Kong’s capital markets, supporting the continued sustainable growth of both, at a time that participants and customers are demanding ever more and better connectivity,” Hong Kong Exchanges and Clearing (HKEx) CEO Nicolas Aguzi said in a statement.
Stock Connect was launched in 2016 and allows investors in Hong Kong and China to buy-and-sell shares on each other’s stock exchanges.
Turnover by mainland investors in Hong Kong shares – south bound connect – in April amounted to HK$192.1 billion ($24.5 billion), the HKEX’s website shows, which was 61% lower than in March. Trading by Hong Kongers on the Shanghai Stock Exchange through northbound connect in April totalled nearly Rmb 800bn ($120bn), which was down about 30% from March, according to HKEx.
