Cross-border Investment
As part of plan to boost financial exchanges on both sides, China has approved mutual listings of exchange traded funds (ETFs) on Hong Kong and mainland exchanges, said the Securities and Futures Commission (SFC) of Hong Kong.
"The SFC welcomes the China Securities Regulatory Commission's approval today of two ETFs to be listed on the Shanghai and Shenzhen stock exchanges that will invest directly in Hong Kong-listed stocks, each tracking a Hong Kong stock index," the SFC said in a statement.
"The approval of the Hong Kong Stock ETFs represents a milestone in implementing the relevant measures under supplements VI and VII to the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)," SFC's Chairman Eddy Fong said.
"Hong Kong Stock ETFs provide an alternative channel for mainland investors to participate in the Hong Kong securities market and further strengthen the cooperation between the mainland and Hong Kong capital markets," he added.
The SFC has also authorized the world's first Renminbi Qualified Foreign Institutional Investor (RQFII) A-share ETF for listing on the Stock Exchange of Hong Kong.
In another sign of growing financial cooperation between mainland and Hong Kong, the Hong Kong Exchanges and Clearing Limited, one of the world's leading exchange companies by market value, agreed to form a joint venture with Chinese exchanges to develop index-linked and equity derivative products.
The new company, expected to be established within three months from the execution of the agreement, will also engage in market promotion, customer services, technical services and infrastructure development, it said.
"The joint efforts of the three exchanges have great strategic significance and mark a milestone in financial co-operation amongst Shanghai, Shenzhen and Hong Kong," Hong Kong Financial Secretary John Tsang said while addressing the signing ceremony.
Yao Gang, vice chairman of China Securities Regulatory Commission, said the commission will continue to support qualified mainland enterprises to go public at the Hong Kong bourse while allowing Hong Kong financial institutions to open joint venture brokerages, fund management companies and futures firms on the mainland.
Song Liping, president and chief executive officer of Shenzhen Stock Exchange, said the JV will help increase foreign investors' exposure to the mainland market via Hong Kong.
"In addition, the JV can help raise the mainland capital market 's influence in offshore markets and provide opportunities to explore opening up measures," Song said.
by Lu Hui
