ETFs listed on both Hong Kong and mainland China exchanges will be included in the existing Stock Connect scheme as of early next week, according to a joint statement by authorities.
“ETF Connect is an important milestone because for the first time Stock Connect is expanded beyond stock trading,” said Ashley Alder, chief executive officer of the Hong Kong Securities and Futures Commission (SFC).
“It will catalyse Hong Kong’s growth as an ETF hub and underscore Hong Kong’s unique role connecting global capital with the mainland,” he added.
The SFC and China Securities Regulatory Commission (CSRC) initially announced in late May the plan to launch ETF connect, but the date was not confirmed until this week.
After the launch, the trading of eligible mainland funds will be open to all Hong Kong and overseas institutional and individual investors through the scheme.
The announcement came ahead of the 25th anniversary of Hong Kong’s handover to the mainland, in the aim to promote the development of capital markets in both markets.
The Hong Kong watchdog said both the SFC and CSRC have worked closely to prepare for the launch since the initial announcement and have finalised relevant rules as well as operational and regulatory arrangements.
The two regulators also agreed on arrangements regarding cross-boundary regulatory cooperation, investor education and other matters in relation to the inclusion of ETFs in Stock Connect.
This includes enhanced enforcement cooperation against cross-boundary illegal activities and market misconduct, said the announcement.
In a separate statement, Hong Kong Exchanges and Clearing (HKEx) welcomed the inclusion of ETFs into Stock Connect and announced an initial list of ETFs eligible for the scheme.
The northbound list includes 83 mainland-listed ETFs, with 53 listed in Shanghai and 30 in Shenzhen.
The list will be reviewed every six months to determine eligibility, said the HKEx.
On the other hand, the Shanghai and Shenzhen exchanges said four Hong Kong-listed funds can be traded starting next week – the Tracker Fund, HSCEI ETF, CSOP HS Tech and iShares Tech.
Together with the three exchanges, the China Securities Depository and Clearing Corporation (CSDC) has previously agreed on the inclusion and trading arrangements, as well as eligibility criteria for ETFs, said HKEx.
