Hong Kong, Chinese exchanges expand RMB products
New exchange-traded funds (ETFs) that aim to
facilitate investment between Hong Kong and mainland China have been approved
by regulators in both jurisdictions.
Hong Kong’s Securities and Futures Commission (SFC)
has approved the first renminbi qualified foreign institutional investor
(RQFII) A-share ETF for listing on domestic bourse Hong Kong Exchanges (HKEx).
The RQFII A-share ETF allows renminbi raised
outside of mainland China to be invested in an instrument that replicates the performance of the A-share Chinese blue chip index.
“RQFII A-share ETFs broaden the range of renminbi
investment products in Hong Kong, offering Hong Kong investors an alternative
channel to invest in the A-share market,” said Alexa Lam, deputy CEO and
executive director of policy, China and investment products, SFC.
The new ETFs are part of an ever-increasing universe
of RMB instruments listed in Hong Kong to stimulate greater investment
in China and its currency.
HKEx is currently preparing to list the first
exchange-traded RMB-denominated sovereign bonds on its market and will being
trading RMB currency futures in Q3.
The SFC has also welcomed the move by the China
Securities Regulatory Commission to allow ETFs that track a Hong Kong stock
index to be listed on the Shanghai and Shenzhen stock exchanges.
“Hong Kong Stock ETFs provide an alternative channel
for Mainland investors to participate in the Hong Kong securities market and
further strengthen the co-operation between the Mainland and Hong Kong capital
markets,” said SFC chairman Eddy Fong.