HKEX and Guangzhou Futures Exchange to explore possibility of developing products to support China’s climate goal
- HKEX and GFEX will collaborate on the feasibility of developing products that can be traded both on onshore and offshore markets
- It is the first collaboration between the two bourses to promote green finance and to tighten cooperation between Hong Kong and the mainland’s capital market
Under the memorandum of understanding, the two bourses will collaborate on products that can be traded both on onshore as well as offshore markets in Hong Kong by international investors, HKEX said.
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“Reflecting our China anchored strategy, HKEX will work with GFEX to actively explore new opportunities to drive the development of a green and low-carbon market in the region, and progress innovations to further the opening-up of China’s futures market,” said Nicolas Aguzin, chief executive of HKEX.
The two exchanges will also work together in areas such as clearing, technology and collaborate on marketing and investor educational efforts, the HKEX said.
The derivatives developed by the two exchanges could provide a hedging tool for traders, brokers said.
“The cooperation between HKEX and GFEX may pave the way for cross border derivatives trading between the mainland and Hong Kong in the future,” said Gordon Tsui, chairman of Hong Kong Securities Association, the industry guild. “This will enhance liquidity of both markets while further opening up the mainland capital market to international investors via Hong Kong.”
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The HKEX in February spent 210 million yuan (US$32.41 million) to acquire a 7 per cent stake in the newly created GFEX, the first time Beijing allowed a direct investment by an offshore investor in a mainland Chinese derivatives exchange.
The MOU marked another milestone in the development of cross-border derivative products between Hong Kong and China.
A futures product based on 50 yuan-denominated A shares on the Shanghai and Shenzhen exchanges will kick off on October 18, HKEX said last Friday, providing a hedging tool for international investors to trade mainland shares.