CSRC and SFC announce inclusion of Exchange Traded Funds into Stock Connect
Published: Jun 28, 2022 11:08 PM
Pedestrians walk outside the Hong Kong Stock Exchange on February 4, 2022. Photo: VCG
Pedestrians walk outside the Hong Kong Stock Exchange on February 4, 2022. Photo: VCG

The China Securities Regulatory Commission (CSRC) and Hong Kong's Securities and Futures Commission (SFC) announced on Tuesday the inclusion of Exchange Traded Funds (ETFs) into Stock Connect, the mutual market access program linking the Hong Kong and mainland equity markets, with effect from July 4, 2022.

Experts noted that the inclusion of ETFs is a vital process on the integration of Hong Kong and the Chinese mainland's markets, further facilitating foreign capital to participate in the domestic market and promoting the access of domestic capital to the international market.

According to the announcement, the CSRC and SFC have cooperated in the preparation of the ETFs for inclusion in Stock Connect since the two regulators released the joint announcement on May 27 this year.

So far, the related business rules, operational plans and regulatory arrangements have been finalized and the technical systems are ready.

"Stock Connect is a bridge for the interconnection of the domestic market and the global market. The inclusion of ETFs will further invigorate and innovative international capital flows," Dong Shaopeng, an expert advisor for the China Securities Regulatory Commission, told the Global Times on Tuesday.

The CSRC and SFC will enhance cooperation to combat cross-border violations and address major or unexpected incidents in a timely and appropriate manner in a bid to protect the legitimate interests of investors.

The Hong Kong Exchanges and Clearing Limited (HKEX) said on its website that when the inclusion takes effect, trading of eligible Shanghai Stock Exchange-listed ETFs through Shanghai Connect and trading of eligible Shenzhen Stock Exchange-listed ETFs through Shenzhen Connect will be, for the first time, open to all Hong Kong and overseas investors, including institutional and individual investors.

The HKEX announced that it will continue to work closely with its mainland exchange partners to ensure the successful launch of the inclusion to benefit investors.