Hong Kong SFC: Regulators to Announce ETF Connect Implementation Details
2nd June 2022 | Hong Kong
The Hong Kong Securities & Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) have announced details of implementation plans to include eligible exchange-traded funds (ETFs) in Stock Connect. Hong Kong SFC: “The principal arrangements for ETF Connect will make reference to those under Stock Connect and follow existing fund operations as well as the laws, regulations and operational models governing trading and clearing in the two markets.” Ashley Alder SFC Chief Executive Officer: “ETF Connect is another milestone in the expansion of mutual market access between Hong Kong and Mainland China. It will provide investors in both markets with more choice and support the healthy development of ETFs by expanding the investor base and improving liquidity.” HKEX Chief Executive Officer Nicolas Aguzin:“ This is the next exciting development in our Connect Programme. ETF inclusion in Stock Connect will be mutually beneficial to both Mainland China and Hong Kong’s capital markets, supporting the continued sustainable growth of both, at a time that participants and customers are demanding ever more and better connectivity. We look forward to working with our Mainland partners and the market as we continue to enhance our mutual market connectivity.”
“ Hong Kong SFC: Regulators to Announce ETF Connect Implementation Details “
ETF, ETF Eligibility for ETF Connect
Hong Kong Exchange: ETFs are, for many, a cost-efficient investment option and a popular choice for diversification. Adding eligible ETFs into Stock Connect will support the healthy development of ETFs in both the Hong Kong and Mainland China markets by expanding their respective investor bases. On 24 December 2021, HKEX, Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) announced their support on the Inclusion, reflecting the ongoing commitment by HKEX and the Mainland exchanges to continue expanding and enhancing the landmark mutual market access programme between Hong Kong and Mainland China’s capital markets.
The launch of the ETF link is subject to regulatory approvals and the completion of market readiness preparations and other operational arrangements. A separate announcement will be made about the official launch date.
The eligibility of Mainland and Hong Kong ETFs for inclusion in ETF Connect will be determined based on various factors such as fund size and whether the index tracked by the fund mainly comprises stocks eligible for trading under Stock Connect. Detailed eligibility criteria will be published by the Mainland and Hong Kong exchanges. The investment quota for ETFs and stocks will be aggregated for calculation and administrative purposes.
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