Approval of Mainland-traded Hong Kong Stock ETFs and Hong Kong-listed RQFII A-share ETF

Alexa Lam, HK SFC Deputy CEO

The Securities and Futures Commission (SFC) welcomes the China Securities Regulatory Commission’s approval June 29 of two exchange-traded funds (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 (Hong Kong Stock ETFs).

“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). 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,” the SFC’s Chairman, Dr Eddy Fong said.

The SFC has also authorised today the world’s first Renminbi Qualified Foreign Institutional Investor (RQFII) A-share ETF for listing on the Stock Exchange of Hong Kong. Through the RQFII investment quota granted by the Mainland authorities, an RQFII A-share ETF seeks to track the performance of an A-Share index by channelling renminbi raised outside mainland China to invest directly in a portfolio of A-shares, which replicates the performance of the underlying A-share 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 Mrs Alexa Lam, the SFC’s Deputy Chief Executive Officer and Executive Director of Policy, China and Investment Products.

“However, before making any investment, investors should carefully read the offering document including the product key facts statement to fully understand how a particular product works and the associated risks, and consult their intermediaries when in doubt,” she added.

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