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Ireland approves UCITS for Stock Connect

A rush of applications are expected after the Central Bank of Ireland's clarification of rules governing how Irish-domiciled funds can utilise the Shanghai-Hong Kong Stock Connect, according to industry group Irish Funds.

The Central Bank set out the regulatory considerations around Irish authorised UCITS seeking to acquire Chinese shares through the Shanghai-Hong Kong Stock Connect on Wednesday.

Although there remain some more issues the Central Bank is seeking to clarify, the publication means it will now consider individual submissions from Irish authorised investment funds who wish to participate in Stock Connect.

The detailed and considered work carried out by the Central Bank on the document demonstrated the importance of this channel to Ireland, said Pat Lardner, chief executive of Irish Funds, which represents the cross-border funds industry in Dublin. 

He said it set the stage for the hundreds of global investment managers who already have Ireland as a strategic base for their cross-border funds to utilize this new access point into the Chinese markets.

The Shanghai-Hong Kong Stock Connect scheme, launched in November last year, allows foreign fund managers limited access to renminbi-denominated A-share stocks.

The scheme was modified in April this year after a disappointing initial response but has since seen a handful of investment managers launch new China funds which invest up to 100% of their portfolios into Chinese A-shares.

“We look forward to a continual building of the links between Ireland and China and the opportunities that can be provided for investors via regulated funds.”

Part of the Mark Allen Group.