The flag of Hong Kong Exchanges & Clearing Ltd. (HKEx) (left), the Chinese national flag and the Hong Kong SAR regional flag (right), fly in the Central district of Hong Kong. (EDMONG TANG / CHINA DAILY)
Exchange-traded funds will begin trading on the Stock Connect linking Hong Kong and the Chinese mainland from July 4, according to a joint statement by the central government and Hong Kong securities regulators on Tuesday.
Hong Kong Exchanges and Clearing, which runs the city’s bourse, and the Shanghai and Shenzhen stock exchanges said on Tuesday an initial list of ETFs could be traded, including 83 mainland-listed ETFs –53 in Shanghai and 30 in Shenzhen
The remarkable step came after the China Securities Regulatory Commission and Hong Kong’s Securities and Futures Commission announced in late May they had reached an agreement on the inclusion of ETFs in principle.
The regulators said then that implementing the scheme would take about two months for preparation, but the processes have since moved faster than expected, taking just five weeks.
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Hong Kong Exchanges and Clearing, which runs the city’s bourse, and the Shanghai and Shenzhen stock exchanges said on Tuesday an initial list of ETFs could be traded, including 83 mainland-listed ETFs – 53 in Shanghai and 30 in Shenzhen. They cover ETFs tracking the ChiNext indices and the CSI300, as well as ETFs in advanced manufacturing, the digital economy and carbon neutrality.
Initial trading will also include four Hong Kong-listed ETFs – the Tracker Fund, HSCEI ETF, CSOP HS Tech and iShares Tech.
The start of trading in ETFs comes three days after the 25th anniversary of the establishment of the Hong Kong Special Administrative Region, and is also the first trading day on the Hong Kong and mainland stock markets following the holiday break.
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HKSAR and SFC officials have stressed Hong Kong’s role as a connector to the mainland markets, saying it will further strengthen connectivity between the city and the mainland.
“The ETF Connect further deepens the integration of the two capital markets, and offers more diverse asset allocation choices to mainland and overseas investors while consolidating Hong Kong’s role as the bridge for the flow of international and mainland capital,” Secretary for Financial Services and the Treasury Christopher Hui Ching-yu wrote in his blog on Wednesday.
“The ETF Connect is an important milestone as it’s the first time the Stock Connect has been expanded beyond stock trading,” said SFC Chief Executive Officer Ashley Alder. “It’ll catalyze Hong Kong’s growth as an ETF hub and underscore the city’s unique role in linking global capital with the mainland.”
aoyulu@chinadailyhk.com