Singapore & China Strengthens Cooperation in Green Finance & Capital Market, New Singapore, Shanghai & Shenzhen Stock Exchange ETFs & Low Carbon Index
3rd November 2022 | Singapore
Singapore & China are strengthening cooperation with new initiatives in Green Finance & Capital Market (new taskforce), new Singapore Exchange (SGX) & Shenzhen Stock Exchange (SZSE) ETFs (Exchange Traded Funds) & new Low Carbon Index family (Includes Shanghai Stock Exchange) to be launched by the end of 2022. For ETFs, participating ETFs are launched under collaborations between China Southern Asset Management and CSOP Asset Management, and between Ping An Fund Management and UOB Asset Management, allowing investors in China and Singapore to access ETF investment opportunities in each other’s markets. For Low Carbon Index Family, the SGX, Shanghai Stock Exchange (SSE) & SZSE will launch the new benchmark for fund managers to launch new green funds focused on China, ASEAN and other countries in Asia.
“ Singapore & China Strengthens Cooperation in Green Finance & Capital Market, New Singapore, Shanghai & Shenzhen Stock Exchange ETFs & Low Carbon Index “
Leong Sing Chiong, Deputy Managing Director (Markets & Development), Monetary Authority of Singapore (MAS): “The launch of the Green Finance Taskforce is very timely, as finance plays a key role in catalysing our transition to a more sustainable future. This collaboration in green finance builds on earlier initiatives to strengthen RMB and capital market connectivity. MAS will continue to work closely with our central bank and regulatory counterparts in China to deepen our financial cooperation and unlock new growth drivers for our economies.”
Singapore MAS Announcement
Singapore and China Strengthen Cooperation in Green Finance and Capital Market Linkages
The Monetary Authority of Singapore (“MAS”) today announced new initiatives to expand cooperation in green finance and deepen capital market linkages with China. The initiatives were discussed at the 18th Joint Council for Bilateral Cooperation (“JCBC”) in Singapore, co-chaired by Singapore Deputy Prime Minister and Coordinating Minister for Economic Policies, Mr Heng Swee Keat, and People’s Republic of China Executive Vice Premier of the State Council, Mr Han Zheng.
2 The initiatives are:
- China – Singapore Green Finance Taskforce (“Taskforce”). MAS and the People’s Bank of China will establish a Taskforce to deepen bilateral cooperation in green finance and facilitate greater public-private sector exchanges to better mobilise private capital for the region’s sustainable development needs. The Taskforce will explore collaboration in areas such as standards and definitions, green and transition financing solutions, data and technology enablers to catalyse green financing flows, and enhance green investment opportunities in China and the region.
- Exchange Traded Funds (“ETF”) Product Link. The Singapore Exchange (“SGX”) and Shenzhen Stock Exchange (“SZSE”) will welcome the first three participating ETFs under the ETF Product LinkThe ETF Product Link operates via a master-feeder structure. A feeder ETF listed on SGX will invest more than 90% of its assets into the master Target ETF listed on SZSE. Conversely, a feeder ETF listed on SZSE will invest more than 90% of its assets into the master Target ETF listed on SGX. by year-end. These participating ETFs are launched under collaborations between China Southern Asset Management and CSOP Asset Management Singapore, as well as between Ping An Fund Management Company and United Overseas Bank Asset Management. This ETF Product Link will allow investors in China and Singapore to access ETF investment opportunities in each other’s markets.
- Low Carbon Index Family by Chinese and Singapore Exchanges. The SGX, Shanghai Stock Exchange and SZSE will jointly launch a Low Carbon Index Family by year-end, that will serve as a benchmark for fund managers to launch new green funds focused on China, ASEAN and other countries in Asia. This will raise investor interest in green investment opportunities in our region, and channel capital towards the region’s leading sustainable firms.
3 Mr Leong Sing Chiong, Deputy Managing Director (Markets and Development), MAS, said, “The launch of the Green Finance Taskforce is very timely, as finance plays a key role in catalysing our transition to a more sustainable future. This collaboration in green finance builds on earlier initiatives to strengthen RMB and capital market connectivity. MAS will continue to work closely with our central bank and regulatory counterparts in China to deepen our financial cooperation and unlock new growth drivers for our economies.”
The ETF Product Link operates via a master-feeder structure. A feeder ETF listed on SGX will invest more than 90% of its assets into the master Target ETF listed on SZSE. Conversely, a feeder ETF listed on SZSE will invest more than 90% of its assets into the master Target ETF listed on SGX.
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