Launch of ETF Connect expected in second half of 2018, Hong Kong bankers’ seminar hears
Connect to focus on trade in plain ETF products initially as mainland investors are not familiar with more complicated offerings
ETF Connect, which will allow international and mainland investors to trade in exchange-traded fund products listed on bourses in Hong Kong, Shanghai and Shenzhen, is expected to launched in the second half of this year, according to bankers involved in the city’s connect programmes.
“The ETF Connect should be able to launch in the second half of this year. Initially, it is likely to be the simple, plain vanilla style of exchange-traded fund products, to be traded under this scheme as mainland investors are not familiar with complicated products,” Patrick Wong, head of China sales and business development at HSBC Securities Services, said on Wednesday.
Regulators in China indicated the ETF Connect will be launched following rule changes giving the China Securities Regulatory Commission access to the identities of investors taking part in the stock connect for better scrutiny of the market.
Wong said since the identification regulations will be ready in the first half, this will pave the way for the ETF Connect to launch in the second half of the year.
“Mainlanders will be interested in trading exchange-traded funds listed in Hong Kong, including index funds tracking stock or bond markets in the US, Europe and Asia,” Wong said at a seminar hosted by the Hong Kong Investment Funds Association.
Mainlanders will be interested in trading ETFs listed in Hong Kong, including index funds tracking stock or bond markets in the US, Europe and Asia
Exchange-traded funds work like a combination of listed stocks and funds that allow investors who buy a unit of the fund to buy into a basket of stocks or bonds that track key indices.