ETF Connect: Regulators announce implementation details

The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) today announced details for the implementation of plans to include eligible exchange-traded funds (ETFs) in Stock Connect. (Note 1)

According to the joint announcement, 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.

“ETF Connect is another milestone in the expansion of mutual market access between Hong Kong and Mainland China,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “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.”

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.

End

Note:

1.  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.