China and Japan have approved six funds to boost the two countries’ stock markets through ETFs, according to China Securities Regulatory Commission (CSRC).
The CSRC has approved four cross-border ETFs which will invest in Japanese ETFs and track Japan’s stock indexes, according to the statement. The other two products invest in Chinese companies and are issued in Japan.
|One ETF Southern China A-share CSI 500||Asset Management One|
|MAXIS HuaAn China Equity SSE 180 indexETF||Mitsubishi UFJ Kokusai Asset Management|
|Huaxia Nomura Nikkei 225||Huaxia|
|Yifangda Nikko Asset Management Nikkei 225||Yifangda|
|Southern China Asset Management TOPIX||Southern China|
|HuaAan Mitsubishi UFJ Nikkei 225||HuaAn|
In April, the Japan Exchange Group (JPX) and the Shanghai Stock Exchange (SSE) established the Japan-China ETF Connectivity scheme, which enables cross-border trading of ETFs.
In the same month, Japanese Nomura Asset Management partnered with China Asset Management as part of the scheme.
Nomura AM in Japan received an additional $200m in QFII (qualified foreign institutional investor) quotas in April, totaling $550m, according to records from China’s State Administration of Foreign Exchange (SAFE).
Hong Kong, since 2016, has been planning a similar scheme with China called the ETF Connect.
It was expected to launch by the end of 2018, according to Sally Wong, CEO of the Hong Kong Investment Funds Association. However, there is no start date and the delay has caused at least one asset manager to pull its ETFs from the Hong Kong market.
Hong Kong-based Enhanced Investment Products (EIP) in April delisted its three remaining ETFs listed in Hong Kong, according to filings from the Hong Kong Exchange.
“The ongoing lack of clarity and communication around the ETF Connect has contributed to our decision,” EIP’s McCabe told FSA.